Bengaluru: Grocery delivery platform Milkbasket has secured $3 million in a Pre-Series A round led by Unilever Ventures Ltd, the investment arm of consumer packaged goods company Unilever Plc, the company said on Tuesday.

Founded in 2015, Milkbasket delivers essential grocery items such as milk, bread, eggs and butter at the doorstep. Chief executive Anant Goel said the company, which currently operates in Gurugram, handles 6,000 orders a day and has a registered user base of more than 10,000.

The company will use the funds to expand within Gurugram, add new categories of grocery products and upgrade its technological capabilities.

Milkbasket plans to expand into Pune, Bengaluru, Hyderabad, and Noida in the coming months, Goel said in an interview. The plan is to expand into one market every 12-18 months, he added.

The company uses a pre-paid model wherein customers are required to load their online wallets with digital cash. Grocery orders made for the day are delivered to the customer by 7 am the next day. Customers have to place orders via the mobile app by midnight. “Our cost of delivery is a fraction of other e-groceries because of the fact that we deliver early mornings, have high density of orders in a particular area, and because we don’t have to interact with the customers during the delivery," said Goel.

The company is eyeing 4 to 5X growth during 2018 and expects to close the year with 20,000 to 25,000 daily orders.

The online grocery delivery space in India has seen a number of entrants in the past, and some of them have either exited the market fully or down sized operations. BigBasket recently unveiled plans to invest up to Rs500 crore to upgrade its technology and supply chain operations. Its competitor Grofers had earlier shutdown operations in nine cities including Coimbatore, Kochi, Bhopal and others due to low demand.

Mint reported in April 2017 that Grofers had explored talks with bigger rival Bigbasket for a potential merger deal. In April 2016, Snapdeal-backed grocery delivery company PepperTap shut down its operations due to a shortage of funds.

E-commerce company Amazon operates grocery delivery in 30 cities in India under its Amazon Pantry service, and also runs Amazon Now, a two-hour grocery delivery in Mumbai, Bangalore and Hyderabad.

Flipkart had re-launched a grocery option on its online market place in November 2017 after its stand-alone grocery delivery pilot named Flipkart Nearby failed take off in 2016.

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