Last year in March, it had raised $62 million in a round that was also led by SoftBank Group. It had utilised the funds for doubling its warehousing space as well as fresh hiring and increasing the number of private labels. It had also told Business Standard earlier this year it was scrapping some of its offline expansion plans.
“Our private label business has been good, with 780 labels so far. We want to take it to 1,200 brands by next year,” Co-Founder and Chief Executive Albinder Dhindsa told Business Standard.
While the company did not disclose its valuation after the latest round, Dhindsa said it was “not yet” a unicorn, or a start-up valued at over $1 billion.
Closest rival Bigbasket said earlier this month that its parent Supermarket Grocery raised $150 million in a funding round led by South Korea’s Mirae Asset-Naver Asia Growth Fund, UK’s CDC Group, and existing investor Alibaba, which pushed it into the unicorn club.
The e-grocery space went through a period of crisis beginning in 2015, with several e-grocery businesses, including Local Banya, PepperTap, AskMe Bazaar, shutting shop due to deep discounting and low margins.
Dhindsa said the outlook for the online grocery sector was now positive and “saner growth” was likely for the remaining online grocery businesses.
Over the last two years, Grofers’ technology platform and focus on core markets has helped it grow 800 per cent to an annual revenue of $400 million.
With increased smartphone usage, the launch of more affordable 4G network data, and increasing consumer wealth are accelerating e-commerce adoption in the country.
According to a recent report on the sector by consultancy EY, e-commerce and consumer internet companies
raised over $7 billion in private equity (PE) and venture capital (VC) in 2018.
“The PE/VC interest in hyperlocal delivery was revived with Google investment in Dunzo. Companies
like Swiggy, Zomato, Grofers, Milkbasket, Dailyninja, etc were able to raise funds for expansion. Companies
focused on improving unit economics by improving order densities, frequency of delivery to achieve operating efficiencies, and use technology to optimise operations and improve customer experience,” the report further said.