Grocery delivery startup, Grofers has raised around $60 million in fresh capital from Softbank Vision Fund (SVF), the first tranche of a larger $120-140 million funding round that the company is stitching together.
It was reported in October 2018 about he current financing round by Grofers. As reported at the time, SoftBank has moved Grofers to its $100 billion Vision Fund. The Japanese group had earlier backed the e-grocer through its balance sheet.
The investment comes at a time when competition in the the online grocery delivery space has heated up, with well capitalised firms such as Swiggy making a beeline for a piece of the action. Grofers’ bigger rival BigBasket is also in discussions to close a new $150 million round as was reported on February 8, which may value the company at $1 billion.
As for Grofers, with the latest round, its post money valuation has been pushed up to around $425 million, according to estimates from business intelligence platform Paper.vc. The investment from SVF in Grofers was preceded by a $1.8 million infusion from Sequoia Capital and $19 million which came from Tiger Global as part of the same Series F round. Both are existing investors in Grofers.
SVF is expected to invest a further $40 million in Grofers, while the firm is yet to close a deal with a new investor which is expected to pump in the balance cash for the round. According to regulatory filings made in Singapore, the renegotiated shareholders agreement for Grofers also caps Softbank’s maximum stake in the company to 49%. Currently SVF holds around 42% stake in the grocery retailer.
Swiggy, which is sitting on a warchest of over $1 billion, recently announced its entry into the grocery delivery space with Swiggy Stores. The company has launched the service in Gurugram first and plans to bring it to other large metro cities over the next one year. Apart from Swiggy, giants Amazon and Flipkart-owned Walmart too are making their own plays in the sector, but all remain relatively small in comparison to leader BigBasket.
After going through a rough patch, Grofers has mounted a comeback with a focus on high-margin private brands for groceries. In the year that ended March 2018, the company reported a loss of ₹258 crore, almost flat from the previous year when it reported a loss of ₹268 crore. At the same time, the company was able to grow its revenue by 58% to ₹53 crore in the same period.
Source: The Economic Times