SUMMARY
Online grocery store Grofers is reportedly in the final stages of raising $55-60 Mn from its largest investor, the SoftBank Vision Fund
The Japanese multinational conglomerate is the largest investor in the Gurugram-headquartered company with around 46% shareholding
In the latest round, Grofers’ existing investors Tiger Global Management and KTB Ventures could also invest $30 Mn
Online grocery store Grofers is reportedly in the final stages of raising $55-60 Mn from its largest investor, the SoftBank Vision Fund (SVF) and other existing investors.
The Japanese multinational conglomerate is the largest investor in the Gurugram-headquartered company with around 46% shareholding. Last year, SoftBank led the $220 Mn Series F funding round for Grofers. In 2018, SoftBank had led the $53 Mn-worth Series E round for Grofers.
According to data on Crunchbase, in November 2019, Grofers received a fund infusion worth INR 320 Cr ($42.8 Mn) from its Singapore-based entity Grofers International.
To date, Grofers has raised a total of around $607 Mn from 12 funding rounds.
In the latest round, Grofers’ existing investors Tiger Global Management and KTB Ventures could also invest $30 Mn. According to an ET report, the company’s valuation in the round would remain flat, at around $650-700 Mn, same as it was in its last funding round.
Meanwhile, the Covid-19 lockdown was beneficial for Grofers, as it saw many people turning to online grocery delivery services. Grofers registered a 60% increase in its gross merchandise value (GMV), compared to pre-Covid-19 levels. Moreover, the company claimed to have seen a 40% increase in basket size during the lockdown.
Founded in 2013 by IIT graduates Albinder Dhindsa and Saurabh Kumar, Grofers offers products across categories such as grocery, fruits and vegetables. It operates in 13 cities.
Grofers On Path To Profitability & IPO
Inc42 reported in April that the online grocery store was looking to invest $50 Mn to strengthen its supply chain and private label category over the next two years. Of the total amount for 2020, Grofers has set aside $15 Mn for private labels as the company believes that it could contribute over 60% of its business during the current surge and subsequently up to $50 million to grow both its supply chain and private label business, over the next two years.
These investments will also be used to enable better distribution of Grofers’ private label — to enable more stores with its products — as well as to partner with more kiranas to streamline its delivery process.
In December last year, Grofers cofounder Saurabh Kumar told Inc42, “We are aggressively growing our business and aiming to clock $1 Bn in revenue by the end of 2019 with a significant focus on our in-house brands in 2019. Our G-brands contribute 40% to our current revenue, and we plan to increase it to 60% in the coming years.”
According to reports, Grofers generates nearly half of its INR 2,000 Cr annual sales from its private brands and labels.
The Covid-19 lockdown-induced surge in business has meant that Grofers has also advanced its plans for issuing an initial public offering (IPO), with the company now planning to go public by the end of 2021.
The company, which had initially planned to go public in 2022, expects to turn profitable this financial year. Grofers’ cofounder and CEO Albinder Dhindsa told PTI that the company has already turned operationally profitable in January 2020, and is on track to become EBITDA and cash positive by the end of this year.
India’s Online Grocery Boom
In September, Inc42 reported that the online grocery market in India, which had recorded $1.9 Bn GMV (gross merchandise value) in 2019, could grow to $3 Bn GMV by the end of this year. This growth can be attributed to several factors, chief being the Covid-19 tailwinds for the segment. Online grocery stores witnessed a rise in demand while countrywide lockdown restrictions were in place. The entry of big players such as Amazon and Reliance in India’s online grocery market is also expected to drive up competition in the sector.
