Mumbai-based Grab A Grub Services Pvt Ltd, a food logistics startup which essentially provides third-party food delivery service to restaurants, has raised $1 million (Rs 6.3 crore) from Oliphans Capital and former Network18 CEO Haresh Chawla, according to a press release.
It does not offer online ordering of food itself and hence is not a B2C internet venture.
Founded by Jignesh Patel, Nishant Vora and Pratish Sanghvi in 2012, Grab is a hyper local delivery service focused on restaurants and food enterprises. The startup has over 500 riders (delivery boys) in Mumbai and connects users to over 350 restaurants in the city.
Grab says it delivered orders worth Rs 35 crore in Mumbai alone in the year ended March 31, 2015.
Its clients include Mainland China, Subway, Smokin Joes, Punjab Grill, Sbarro, Cocoberry, Pesca Fresh, Maroosh, Birdy’s, Theobroma, Busago, Cafe Mangii, Torrp it Up and Zaafran.
The funding will enable Grab to expand into new markets like Pune and others.
Patel is director of operation and quality control while Vora looks after operations and human resource; Sanghvi is in charge of business development, finance and technology. Before founding this venture, Patel was working with Century Electronics, Sanghvi worked with BlackRock in the US for seven years while Vora was involved with his family business after completing his education.
The company has just launched in Pune and plans on deploying 800 delivery boys in the city enabling it to deliver approximately 7,000 orders daily across 700 outlets.
“Home delivery orders are a significant portion of a restaurants turnover. However, the last mile delivery is a challenge for most restaurants. While Grab reduces a restaurant’s delivery costs by converting it from fixed to a variable cost, it also allows it to expand its reach to a larger customer base,” said Sanghvi.
Grab has recently also tapped into the tiffin delivery segment predominantly run by Mumbai’s famous dabbawalas.
When it comes to startups in this space, predominantly, there are two sets of ventures. One essentially connects consumers with local restaurants and either just comes across as an ordering platform (Foodpanda, Tinyowl and others) or even manages delivery (Swiggy and Mealsonwheels). Foodpanda recently started its own delivery services connecting both restaurants which already have their own delivery boys as also those who do not, to the user.
The other set connects consumers to independent chefs or offers food ordering from in-house kitchens—Bite Club, Yumist, SpoonJoy, TapCibo and InnerChef.
Both the groups of ventures have attracted capital from VC firms.
Swiggy raised $2 million from SAIF Partners and Accel Partners in a seed round; Mealsonwheels was acquired by Ant Farm.
Grab does not compete with these ventures directly as it doesn’t have a direct consumer ordering interface.
“While online food ordering is catching the customer’s attention, restaurants eventually take care of the final delivery. Hence, we do not face competition from the online food ordering vertical. Hyper-local logistics remains our forte and our focused attention on its execution is Grab’s biggest strength,” said Vora.
Mumbai-based Oliphans was founded in late 2012 and provides both early-stage and growth equity capital to companies operating in India. It also counts investments in facility management services firm BVG India, cable operator DEN and e-commerce related logistics firm Ecom Express.
Chawla is former CEO of Network18 who quit the media firm in November 2011 after a decade-long stint with the company and joined PE firm India Value Fund Advisors (IVFA) as a partner. Last year, IVFA said it is expanding its investments in food and consumer internet sectors to be led by Chawla.
It had said Chawla will form a separate entity in his personal capacity to invest in early stage companies from these sectors.
(Edited by Joby Puthuparampil Johnson)