Bengaluru-based online grocer ZopNow has seen its net loss increasing by 278% to Rs 14 crore, despite revenue increasing by 232% for FY16.
Bengaluru-based online grocer ZopNow has seen its net loss increasing by 278% to Rs 14 crore, despite revenue increasing by 232% for FY16. ZopNow, which is run by ZN Retail, has investors ranging from Dragoneer Investment Group, Accel Partners and Qualcomm Venture.
Recent filings of documents with the registrar of companies show that ZopNow posted a revenue of Rs 29.3 crore in the financial year 2015-16, compared to Rs 8.8 cr for the financial year 2014-15. However, the increase in revenues didn’t help the company in stemming the losses. It reported a loss of Rs 14 crore for FY16, up from the loss of Rs 3.7 crore reported in FY15.
Just eight months ago, co-founder Mukesh Singh stepped down and former JP Morgan executive director Raj Pandey joined the firm as CEO.
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Founded in 2011, ZopNow, incorporated as ZN Retail, had last raised funds of $10 million from its existing investors on April 2015. It follows a no-inventory model wherein the company does not own warehouses but provides technology and logistics operations for hypermarket stores. ZopNow offers goods ranging from categories like utensil cleaners and toys to vegetable and fruits.
The hyper local grocery delivery space has several players such as PepperTap and Grofers which have an online marketplace model. Inventory-led firms such as BigBasket, LocalBanya and EkStop, which was acquired by Godrej Nature’s Basket, are also pitted as ZopNow’s rivals in this online grocery business vertical.
ZopNow’s loss is in line with its bigger rivals like BigBasket and Grofers that have also not broke even yet. While the former posted a loss of R277 crore, the latter reported a loss of R61 crore for FY16.
Continued losses and uncertain investment climate have been making the success of such niche ecommerce start-ups quite challenging. Some like PepperTap have already wound up their businesses and others like Mumbai-based LocalBanya have stopped taking orders. Even bigger rivals like Grofers, due to high costs and expansion, were forced to trip operations, lay off staff and redefine their business model.
Sameer Ranjan Bakshi