Grofers has put plans for a public listing this year on the back burner as it is able to raise funds privately, Dhindsa said
Grofers, which became the latest Indian startup to attain unicorn status, plans to deliver groceries within 10 minutes through its so-called dark (online orders only) stores, co-founder and chief executive Albinder Dhindsa said.
The online grocer recently raised more than $120 million from food aggregator Zomato Ltd and existing investor Tiger Global Management. The fundraising round, which is still to be completed, may attract more investors wanting to tap into India’s fast-growing online grocery market, Dhindsa said in an interview.
SoftBank-backed Grofers is the 25th domestic startup to turn unicorn or achieve a valuation of more than $1 billion this year, underscoring a surge in overseas investors’ interest in Indian startups.
“We have comfortably passed the unicorn valuation. So, yes, we are a unicorn now. As a company, we do not like to focus on valuations and investments. Rather our focus is to continue growing the company and put our efforts into the work we are doing," Dhindsa said.
Grofers made the latest fundraise at a valuation of $1.1 billion, according to an individual aware of the discussion. The eight-year-old e-grocer had earlier declined to comment on reports that it had achieved unicorn status.
Dhindsa said Grofers is undergoing a transition with a strong focus on express deliveries, with an aim to supply groceries in less than 10 minutes.
He said the company had put plans for a public listing this year on the back burner as it is able to raise funds privately. “Well, plans changed considering the investor interest in our business and the grocery segment at large. If you look at the industry now, Grofers is the only top e-grocer that today can garner investments from private equity investors. We have parked our ambitions to list publicly for now," Dhindsa said.
The company is now putting its muscle behind the 10-minute delivery model and has started its focus with the top 12 cities on the platform.
“Our journey to what is called express deliveries started last year where we began delivering groceries in 35-40 minutes to customers. And that is the only focus now for the company. This means that we will be taking our 10-minute grocery model to all cities we operate in eventually," he said.
Grofers aims to eventually make all customer deliveries under 10-minutes across the 38 cities it currently operates in.
“The focus, for now, is the top 12 cities where we will be introducing this model and, over time, take it to the next 25 cities. For instance, on a particular day last week, we delivered over 15,000 orders, all within the 15-minute timeline. Our aim is that all orders on Grofers should be delivered in under 10-minute eventually," he added.
To execute this, Grofers is partnering with merchants on-ground and helping them set up dark stores, which will only be focused on online deliveries.
“The stores we were partnering with last year are different in character as compared to this year. Essentially following the ‘dark store’ model, the stores being onboarded this year are e-commerce first and focus entirely on online deliveries. Merchants are putting in their own investment to set up these stores for us, and Grofers will help finance some of these merchants," Dhindsa said.
“We will be getting lending partners to help these merchants, and Grofers might look to acquire an NBFC (non-banking financial service) licence if more support is needed," he said.
He said there are 280 stores from the top 12 cities that are currently at different stages of going live on the Grofers platform.
After confirming its investment in Grofers in July, Zomato said it will resume selling groceries on its platform after discontinuing it last year. Recently, the Competition Commission of India also approved Zomato’s investment in Grofers and its wholesale unit Hands on Trades Pvt. Ltd.
Zomato now owns a 9.3% stake in both Grofers and its wholesale unit. However, Dhindsa said there is no plan to integrate the platforms. “For now, the Zomato investment in Grofers is purely from a financial standpoint," he said.