Online supermarket Grofers on Wednesday said it raised $200 million in series F funding led by SoftBank Vision Fund (SVF). Grofers will use the funds to expand into new markets, widen its portfolio of private label offerings and build its supply chain and warehousing infrastructure, the Gurgaon-based company said in a statement.
The funding round also saw participation from new investor KTB and existing investors Tiger Global Management and Sequoia Capital. This represents the largest primary financing round in the online grocery sector in India, the company said.
Grofers has so far raised about $441.8 million, according to data from Crunchbase.
Analysts estimate valuation of the online grocer to be around $520 million post this funding round.
The firm, which believes the next phase of growth will come from middle-income India, had earlier said its strategy is to make cheaper consumer goods available to the masses.
The company which was earlier a pure hyperlocal and shifted to becoming an online grocer with an inventory-led model is banking on private labels in the fast moving consumer goods (FMCG) segment to drive its second phase of growth. The retailer offers both premium and entry level products across segments like food and beverages, personal care, household care, oral care, furniture and kitchen tools.
The strategy is still the same. We are still going to offer more of our own products. The additional capital will be used to create more warehouses. We are working with more small businesses and manufacturers. We want to bring warehousing closer to where they are, Albinder Dhindsa, co-founder and CEO of Grofers, told FE.
In terms of expansion, the company will be expanding to cities around Delhi NCR, Kolkata, Mumbai where it already claims to be the market leader, Dhindsa said. That is part of the game plan..going deeper into same cities with more capacity, he added.
The company narrowed its losses in FY18 to `258.30 crore from `268.32 crore a year ago. Revenue from operations jumped 125% to `29.83 crore.
The company claims that over the last two years, its technology platform and focus on core markets have helped it grow a staggering 800% to achieve an annual revenue of $400 million.
The funding comes close after rival BigBasket turned unicorn with a fresh $150-million funding led by Mirae Asset-Naver Asia Growth Fund.
The competition in the e-grocery segment is intensifying as companies go all out to grab the biggest pie of the market where consumers are increasingly taking to shopping on smartphones. Earlier this year, online food delivery platform Swiggy launched its on-demand service Swiggy stores through which it will cater to a consumer s daily needs by partnering with offline stores.
We are building Grofers for the millions of Indians who cannot buy groceries at low prices due to multiple middlemen and the absence of large aggregators, Dhindsa said.