Grofers India Pvt. Ltd has raised $200 million (Rs 1,406 crore) in a new funding round led by SoftBank Vision Fund, marking a turnaround in its fortunes three years after it scaled down operations and sacked some employees.
The capital will help the Gurugram-based online grocer fight off competition from bigger rival BigBasket, which raised $150 million earlier this year from South Korea’s Mirae Asset, British investor CDC Group Plc and China’s Alibaba Group. Grofers and BigBasket also compete with Walmart-owned Flipkart and Amazon.com Inc. in the online grocery delivery market.
Grofers said in a statement on Wednesday that new investor South Korea-based KTB Ventures as well as existing investors Tiger Global Management and Sequoia Capital also put money in the Series F funding round.
Co-founder and CEO Albinder Dhindsa said the company will use the capital to set up operations in new cities.
Separately, explaining the rationale behind the fresh capital infusion into Grofers, SoftBank Investment Advisers partner Vikas J Parekh said the online grocer had a strong partner network and supply chain.
Grofers didn’t disclose its valuation after the latest infusion. It’s valuation was said to have fallen 20% to around $300 million in March 2018 when it raised Rs 400 crore ($62 million) in a Series E round from SoftBank, Tiger Global and Russian billionaire Yuri Milner's Apoletto Managers.
Grofers, founded by Albinder Dhindsa and Saurabh Kumar, began operations in 2014. It expanded rapidly in initial years and raised more than $150 million from the likes of SoftBank, Tiger Global, Sequoia and other investors.
However, the company ran into rough weather thereafter. It shut down operations in nine cities in January 2016, laid off some employees over the following few months and tweaked its business model.
The changes helped the company get back on its feet. In December 2017, Dhindsa told VCCircle that it had broken even in a couple of smaller cities and was looking to break even in bigger cities. He had also said that Grofers was “not very far away” from BigBasket, claiming that the two companies had different customer bases and that each had a strong presence in different parts of the country.
Grofers hasn’t yet filed its financial results for the year through March. For 2017-18, the company’s net sales more than doubled to Rs 29.8 crore from Rs 13.2 crore the year before, according to VCCEdge, the data research arm of Mosaic Digital. Net loss shrank to Rs 258.3 crore from Rs 268.3 crore.