Grofers pumps additional capital in Series F round even as BigBasket, Amazon, Flipkart heats up competition

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Published: July 15, 2019 1:42:08 PM

SoftBank-backed online grocery venture Grofers, which announced $200 million in Series F round in May this year, has added modest $10 million to the existing round from Abu Dhabi-based Capital Investment LLC.

Grofers had raised Series F round from SoftBank Vision Fund, South Korean fund KTB Ventures and existing investors Tiger Global, Sequoia Capital.

SoftBank-backed online grocery venture Grofers, which announced $200 million in Series F round in May this year, has added modest $10 million to the existing round from Abu Dhabi-based Capital Investment LLC even as competition in the digital grocery segment continues to heat up with its bigger rival BigBasket turning unicorn in March this year apart from Flipkart and Amazon looking at grocery to ramp up their growth.

Capital Investment LLC, which “appears to be an investment vehicle of the UAE based Abu Dhabi Investment Group,” has received 1.9 lakh Series F shares, according to the regulatory filing sourced from business signals platform Paper.vc.

“Even while the ticket size remains small, it is interesting because it indicates a possible renewed interest in direct investments by Arab capital in the India growth story,” Vivek Durai, Founder, Paper.vc told Financial Express Online.

Grofers had raised $200 million round led by SoftBank Vision Fund, South Korean fund KTB Ventures and existing investors Tiger Global, Sequoia Capital.

Comments from Grofers based on the email sent for this story will be updated as and when received.

The valuation of the company, however, has remained the same — around $497 million from its Series F round, Durai said in a separate note.

Importantly, from the Series F round of $200 million, “only $130 million appears to have been received by its Singapore-based parent company — Grofers International,” he added.

Grofers is already working on converting around 200 brick-and-mortar stores into its own branded outlets in coming months to grow business via its private label. The company has already converted around 100 such stores, PTI had reported earlier this month.

“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, had told FE.

Bigbasket had added more than Rs 1,000 crore in revenue in FY18 to Rs 1,605 crore from Rs 580 crore in FY16 in comparison to merely around Rs 40 crore added by Grofers to its FY16 revenue of Rs 14.3 crore to take it to Rs 53.5 crore mark in FY18, as per legal filings sourced by Paper.vc.

Also, while BigBasket has so far raised $989.5 million in 13 rounds, Grofers has secured $461 million (excluding latest funding) in seven rounds, as per deals tracker Crunchbase.

On the other hand, Amazon has earmarked “$500 million (that) are committed mostly to agriculture, farmers and farm-to-fork,” Amit Agarwal, Senior Vice-President and Country Head, Amazon India, told ET Now recently.

India’s digital grocery segment was worth $2 billion last year and is expected to grow to $5 billion by 2020 as with increasing digital adoption, demand and supply levers will converge to boost sector’s growth, according to consulting firm RedSeer.

Businesses are realigning their business model and focusing on warehousing capabilities in areas of high demand to offer better product availability and delivery experience, as per RedSeer.

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