Local delivery start-up Grab.in set to raise $10 million

The firm raised an early-stage round worth $1 million from Oliphans Capital and independent investor Haresh Chawla in April

Mumbai: Grab a Grub Services Pvt. Ltd, a local delivery company that operates as Grab.in, is on the verge of closing a funding round worth $10 million, according to two people directly involved in the deal. It raised an early-stage round worth $1 million from Oliphans Capital and independent investor Haresh Chawla in April.

The Mumbai-based company was founded in 2012 by Jignesh Patel, Nishant Vora and Pratish Sanghvi.

Sanghvi confirmed that the firm is looking to raise funds, but declined to comment on the size of funding. “We are looking to expand the delivery network to 15 new cities that include Chandigarh, Jaipur and Chennai," he said.

The company is also improving its technology, investing in marketing initiatives and expanding the merchant network to 1,000 merchants by 2016. Grab.in provides its technology solutions to merchants for tracking orders and deliveries. “We work with over 450 merchants, do 4,500 transactions with a value of 35 crore. Eighty-five per cent is food delivery and the balance is medicines and other goods," Sanghvi said.

Investment banking firm Merisis Advisors is advising Grab on its fund raising. Merisis declined to comment for the story.

The company charges merchants a flat fee, depending on volumes and value of the transactions. Sanghvi expects non-food deliveries to be 50% of total deliveries in the next six months. The company works with brands like Pizza Hut, Subway and Faasos. It has tied up with burger chain Burger King.

The hyperlocal delivery space has been getting a lot of investor attention. In the business-to-consumer (B2C) space, Grofers raised $45 million from Sequoia, Tiger Global and others; Peppertap raised $10 million from Saif and Sequoia.

In the business-to-business, or B2B space, Roadrunnr raised $11 million from Sequoia Capital and others in July and Pickingo Logixpress Pvt. Ltd raised $1.3 million in a funding round led by Orios Venture Partners in August. Shadowfax also raised $300,000 from a group of angel investors, that include Snapdeal founders, the same month. In July, Angular Technologies Pvt. Ltd, that operates as LazyLad, raised $500,000 in a pre-Series A round (early stage) from angel investors.

According to July data by Tracxn Technologies Pvt. Ltd, in 2014 over 100 start-ups were founded in this space in India and over $100 million has been invested in the sector since January.

Vishal Pereira, managing director at advisory firm CreedCap Asia Advisors, said efficiency will be the biggest factor in deciding who emerges as the leader in a market which has several smaller players right now, and more money will flow into the B2C models as they have to spend more on customer acquisition, while B2B models don’t have such expenses.

The trend in India may be a trickle-down effect of the global trend. Globally, hyper-local delivery has emerged as an attractive sector for investors. Beijing-based Beequick closed a round of funding worth $20 million in March. While Sequoia has made large bets in this space in India, it has also invested in the same space in the US.

“Right now the hyperlocal model is all about having a large number of delivery boys to cater to demand. Over time, delivery commitments will move from a committed time like 3.45pm to committed slots like 3-4pm. Small commercial vehicles will also be used as mobile hubs and delivery vehicles," Pereira said.

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