Grofers looks to bolster supply chain with new funds

Online grocery startup, Grofers has raised Rs 400 crore in a fresh funding round led by SoftBank. The company says that the new funds will be utilised to build more private labels and improve supply chain. Tiger Global, the New York-based fund which is also an existing investor, also participated in the round along with Russian tech billionaire Yuri Milner.

This is the first financing round for Grofers after it raised $120 million at the end of 2015, when on-demand delivery segment witnessed a severe cash crunch.

The total funds raised by the Gurgaon-based firm now stands at $226.5 million. The latest capital infusion is expected to help Grofers build its war chest in the battle against retail giant Amazon and Bangalore-based online grocer BigBasket.

“We are looking more towards the supply chain and private label side, we are not planning to enter more cities. We will build more capacity to serve more customers in the cities we are in. We do not have any offline plans, we tried it in 2016 and were not really convinced. We are not looking at offline at all,” said Albinder Dhindsa, co-founder and chief executive officer of Grofers.

Dhindsa co-founded Grofers with Saurabh Kumar in 2013. Grofers moved from a hyper-local express delivery model to one which runs scheduled deliveries in 2016. The startup for now will focus only on its online platform. “We will be aggressive on our private labels; we want to make that business larger. Currently, 20 percent of our business is private label and we want to increase it to 40 percent by end of the year,” added Dhindsa.

Grofers presently serves 13 cities offering products across categories like grocery, fruits and vegetables, beauty and wellness, household care, baby care, pet care, bakery and meats and seafood, among other things.