India’s largest online grocer BigBasket.com which recently raised $50 million from its existing investor Bessemer Ventures, is eying a $1 billion valuation over the next 24 months. The online grocery business is expected to touch $20 billion in India by 2020, and BigBakset aims to remain the market leader. Its CEO and co-founder Hari Menon speaks to Prabhu Mallikarjunan about the challenges in the industry and the company’s expansion plans. Edited excerpts:

Can you tell us more about your expansion plans?
We currently have presence in six cities- Bengaluru, Hyderabad, Mumbai, Pune, Chennai and NCR. By October, we will enter Ahmedabad and Kolkata. We would also venture into 35 tier II cities. We will scale our one-hour express delivery option, which kicked off this month in Gurgaon, to all other prime cities by end of this year.

What is the biggest challenge BigBasket is facing?
Our biggest challenge is in retaining the blue-collar workforce. Around 70% of our employees are in this segment, including people picking up stock, packaging and delivering goods. The attrition rate is as high as 10-15% month-on month.

Do you have any plans for further acquisitions?
No, we do not intend to buy any of the small players in the market. We would like to remain the market leader in this segment, and we welcome competition as it would help in opening up the markets faster. Our recent acquisition of Delyver, a Bengaluru based hyper-local delivery startup, will help in delivering goods much faster.

Do you intend to raise further funds for expansion?
We have raised $111 million so far and these funds will be primarily used for our expansion plans. We plan to raise another $150 million over the next two years, and we have appointed Citibank to help raise this fund. This money will mainly be used for marketing our brand.

When do you expect to break-even?
We expect to break-even by end of 2017. We are able to make profits much faster in smaller towns as the investment is lesser compared to bigger cities. For instance, a place like Mysore has seen great traction.