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Business News/ Companies / Start-ups/  Grofers raises $120 million in fresh funds

Grofers raises $120 million in fresh funds

Grofers raises the funds from SoftBank, with Russian entrepreneur Yuri Milner and existing investors Tiger Global and Sequoia also participating in the round

Softbank is expected to take 20-30% stake in Grofers, according to a source. Photo: Ramesh Pathnia/MintPremium
Softbank is expected to take 20-30% stake in Grofers, according to a source.

Photo: Ramesh Pathnia/Mint

Mumbai: Gurgaon-based hyperlocal delivery start-up Grofers, run by Grofers India Pvt. Ltd, said on Wednesday that the company has raised $120 million in fresh funds largely from Japan’s SoftBank Corp. Russian entrepreneur and venture capitalist Yuri Milner and existing investors Tiger Global and Sequoia Capital also participated in the round, according to co-founder and chief executive Albinder Dhindsa.

The deal is likely to value the company slightly below $400 million, Mint reported on 7 October.

The new round of fund-raising comes within a year of Grofers raising $35 million from existing investors Tiger Global Management and Sequoia Capital in its third round of funding in April. In the second round in February, both Tiger and Sequoia invested $10 million in the company.

The Times of India first reported the news of the latest fund-raising on Wednesday morning.

Softbank is expected to take 20-30% stake in the company, according to a source aware of the development who spoke on condition of anonymity.

Grofers currently delivers in 25 cities and gets about 30,000 orders in a day. The company lists all neighbourhood stores on its platform (from grocery shops to pharmacies), and employs a delivery crew of 4,000 people that is growing rapidly.

Gurgaon-based Grofers was founded in 2013 by Saurabh Kumar and Dhindsa. The news comes at a time when the investment frenzy in the start-up ecosystem seems to be toning down.

In July, SoftBank announced that the firm will shut down its venture capital (VC) arm and avoid investing in early-stage firms, Re/code, the popular US technology news website, reported, citing Nikesh Arora (Softbank’s president), who said the “large-check marketplace" was less crowded.

In October 2014, SoftBank pledged to invest a total of $10 billion over a decade in the country. It is currently an investor in India’s largest cab hailing service Ola, second-largest e-commerce marketplace Snapdeal and budget hotel aggregator Oyo Rooms.

Globally, hyperlocal delivery companies are attracting serious investor interest. In January, US-based Instacart was valued at $2 billion after it received $220 million from Kleiner Perkins Caufield and Byers, Comcast Ventures, Dragoneer Investment Group, Thrive Capital and Valiant Capital, among others.

Sequoia also invested in US-based DoorDash, an on-demand food delivery start-up.

Grofers competes with Snapdeal-backed PepperTap (Nuvo Logistics Pvt. Ltd), TinyOwl (TinyOwl Technology Pvt. Ltd) and Swiggy (Bundl Technologies Pvt. Ltd) that connect customers with supermarkets and restaurants through apps and deliver products on demand, in a few hours or even quicker.

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Published: 26 Nov 2015, 11:14 AM IST
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