We are a unicorn now: Grofers co-founder Albinder Dhindsa
3 min read 23 Aug 2021, 10:46 AM ISTThe recent investment of over $120 million from food aggregator Zomato Ltd. and existing investor Tiger Global Management, made the e-grocer the 24th startup this year to enter India’s growing unicorn club
PremiumFor eight-year-old e-grocer, Grofers, a massive transition is underway, as it bets big on express deliveries, and hopes to make all deliveries on its platform in under the 10-minute mark.
The recent investment of over $120 million from food aggregator Zomato Ltd. and existing investor Tiger Global Management, made the e-grocer the 24th startup this year to enter India’s growing unicorn club, confirms Grofers co-founder and chief executive officer, Albinder Dhindsa told Mint.
However, the round is still not closed and may attract further investment from new investors, wanting to back India’s growing e-grocery space. In an interview, Dhindsa talks about the muscle which the company is putting behind its express delivery model, reasons why it abandoned its public ambitions, as well as the future direction for the company.
Edited excerpts:
Why is Grofers pivoting to the 10-minute delivery model?
Over the past five years we have already done most of the hard work to execute the 10-minute delivery model and invested heavily to build our infrastructure, technology backend, transportation capabilities and brand relationships.
Our journey to what is called express deliveries started last year, where we began delivering groceries in 35 minutes - 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.
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 15000 orders, all within the 15-minute timeline. Our aim is that all orders on Grofers should be delivered in under 10-minute eventually.
What is the kind of investment that Grofers is looking to put into the express delivery category?
The stores that 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 focussed 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. We will be getting lending partners to help these merchants and Grofers might look to acquire an NBFC license if more support is needed.
There are close to 280 stores (of about 2000 square feet) from the top 12 cities, which are currently at different stages of going live on our platform. Some parts of this network we built last year as well, in terms of small warehouses.
Will Grofers be raising further investments as a part of the current round?
We haven’t closed the current round yet and will get in new investors as a part of this round. Beyond that we will not be able to share at this moment.
Does the recent investment from Zomato and Tiger Global make Grofers a unicorn?
We have comfortably passed the unicorn valuation. So yes, we are a unicorn now. As a company now, we do not like to focus on valuations and investments. Rather our focus is to continue growing the company and put our efforts in the work we are putting in.
What are the possible integrations which we can see with Zomato and Grofers, post the investment?
For now, the Zomato investment in Grofers is purely from a financial standpoint. We haven’t explored any integrations with the Zomato platform yet.
(In the past Zomato has worked with Grofers as a vendor for procuring groceries as a part of its Hyperpure business.)
Grofers was aiming to be overall profitable this year. Where does it stand now?
Over the course of last year, we maintained financial discipline to ensure that we will be covering operating costs through our revenues, while raising investments only for building new platform-related innovations.
We continued to be margin positive on a per unit order level, last year, and hope to maintain the streak this year as well.
The only losses that we currently make are the investments we are making on newer areas of growth.
Why did Grofers move away from its plan to list publicly, this year?
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 which today can garner investments from private equity investors in the market. We have parked our ambitions to list publicly for now.
