The online grocery space in India is heating up with international investors betting big on startups in th space. Just over a month after Alibaba invested in BigBasket, Grofers has raised Rs.400 crore in a fresh Series E funding round led by Japanese conglomerate SoftBank Group.
The funding round also saw other investors including Tiger Global and Apoletto Asia. Total funds raised by the leading e-grocer thus stand at $226.5 million.
With this round of funding, Grofers will continue to invest in building private labels and supply chain improvements. A significant amount of investment will go towards building infrastructure and technology and efficient supply chain management to achieve deeper penetration in existing Grofers cities.
“This fresh round by our existing investors is a vote of confidence and trust in the turnaround at Grofers. We took some hard decisions to fix parts of the business that were not scaling well. Our efforts have clearly contributed in making sure we have a clear path to profitability as well as the largest market share in the online grocery segment; having grown four-fold in the last one year for monthly sales in excess of Rs.100 crore,” Albinder Dhindsa, Co-Founder and CEO, Grofers, said.
Founded by Saurabh Kumar and Albinder Dhindsa in 2013, Grofers has previously raised $166.5 million from investors like SoftBank, Sequoia Capital and Tiger Global.
This funding round signals a major turnaround for the online grocer that nearly shut down its operations a few years ago after scaling down its business significantly. It then changed its business model from being an on-demand player to that of a hybrid between that and inventory-led model.
Gorfers currently clocks an average of 25,000 orders a day with an average order value of Rs.1400. With its major portion of the business coming from North India, it claims to have turned operationally profitable in Delhi NCR on a per-order basis.
The online grocer recently also launched its loyalty program called Grofers Smart Bachat Club, which has already crossed 100,000 subscribers in 2 months.
This is the second major funding in the online grocery space in India after Grofer’s biggest rival BigBasket raise $300 million in a Series E funding round led by Alibaba.
With the overall online grocery market expected to move up the curve and touch $1 billion by this year, several players have forayed into this space incuding Flipkart, Amazon and Quickr.