Online-to-offline grocery platform Avenue11, based in Bengaluru, has raised Rs 26 crore ($3.6 million) from Brand Capital, the ad-for-equity arm of media house Bennett Coleman & Co. Ltd (BCCL), said a report.
Avenue11 is at least the sixth online grocery venture BCCL has backed, besides LocalBanya (now shut), BigBasket, Delybazar, ZopNow and Country Delight. The media house has also bet on offline retailers such as Future Group.
Planet11 Ecommerce Solutions India Pvt. Ltd, which owns Avenue11, is planning to launch a physical store in a few months, The Times of India reported, citing Sharique Ahmad, chief strategy and planning officer at the parent firm.
Planet11 was founded by Korean expat and serial entrepreneur Nakkyun Chong in 2016. Chong is a mobile and online commerce expert, having founded eight companies so far with a total investment of $700 million. He claims to have managed 13 mergers and acquisitions and led teams of up to 1,000 employees.
Avenue11 is operational only in Bengaluru, serving about 35,000 customers across the south and east zones of the city, the report said.
Earlier known as Kirana11, the platform delivers fresh produce and vegetables, staples, snacks, personal care products, and home essentials. It also ships fruit and vegetables to merchants and institutions.
The platform currently clocks a monthly gross merchandise value (GMV) of Rs 90 lakh, the report said. It’s in the process of expanding warehouse capacity in Hoskote (Bangalore Rural district) from 25,000 square feet to over 55,000 sq ft.
BCCL, which publishes The Times of India and The Economic Times newspapers and operates television channels as well as a host of websites, strikes ad-for-equity deals through Brand Capital wherein companies are given ad space in lieu of stake.
Another BCCL unit, Times Internet Ltd, acquires stakes in tech firms in media and entertainment. A VCCircle analysis in November 2017 showed that BCCL, along with Brand Capital and Times Internet, is one of the most prolific private equity-style and venture capital-style investors in India.
BCCL’s most recent investments include home diagnostics services provider 5th Vital, online lending firm FinReq, interior design solutions marketplace HomeLane, online home decor startup Livspace, e-commerce firm ShopClues and online food delivery platform FreshMenu.
Online grocery segment in India
In the past few months, the online grocery segment in India has seen significant funding activity.
Gurugram-based micro-delivery grocery startup Milkbasket raised $7 million in a Series A round led by early-stage investment firm Kalaari Capital in May this year.
In April, Delhi-NCR-based supermarket chain Honey Money Top Retails acquired grocery delivery app iOrderFresh in a share-swap deal.
In March, Gurugram-based online grocery startup Grofers India Pvt. Ltd raised Rs 400 crore ($62 million) in a Series E round led by existing investor SoftBank, a Japanese internet conglomerate.
Besides these players, US-based e-commerce giant Amazon and homegrown Flipkart offer online delivery of groceries and daily essentials.
Last year in November, e-commerce major Flipkart announced a soft launch of its grocery delivery service.
Amazon received regulatory approval to set up a retail unit in the country to sell private food labels. It has committed $500 million over the next two to three years towards this food retail unit. The global e-tailer also offers online delivery of groceries and daily essentials through its app Amazon Now and its digital supermarket service Amazon Pantry. Earlier this year, it was reported that Amazon is quietly rolling out its ambitious food retail venture in India, starting out with Pune.
Another player that entered the fray is Kishore Biyani-led Future Group. In April, the firm said that it will launch a mobile-based grocery delivery service by leveraging its EasyDay network of neighbourhood-format stores. The company will use the EasyDay stores to serve its customers within a radius of 2-2.5 kilometres.
Future's two previous online ventures - Future Bazaar and Big Bazaar Direct – failed to gain traction and eventually shut down.
According to analysts, a strong synergy between digital and bricks-and-mortar stores will pave the way for India’s grocery sector.