Bengaluru: Online grocer Grofers has raised $220 million in a round led by SoftBank Vision Fund as part of its series F, which also saw participation from south Korean investment firm KTB Ventures and existing investors Tiger Global and Sequoia Capital. This investment, which will be used to expand the company’s supply chain operations, is one of the biggest rounds of financing to take place in the Indian online grocery sector.
This comes just a few weeks after Grofer’s biggest rival Alibaba-backed Big Basket received $150 million in funding, giving enough firepower to both companies to battle it out for market leadership in the online grocery sector. Ecommerce giants Amazon and Flipkart have also been growing their grocery offerings.
Grofers, which started out as a hyperlocal grocery delivery player in December 2013 has moved to warehouse-model over the last 2-3 years, with a recent focus on private labels. Grofers does not offer fresh produce or same-day deliveries unlike its competitor Big Basket.
“We are clear about our target audience,” said Albinder Dhindsa, chief executive of Grofers. “It is going to be middle India that goes after planned purchases and low-priced offerings.”
Almost half of the company’s sales are from their private label offerings, which will only increase further.
The company has gained momentum over the last few years, following the pivot in their business model. Dhindsa claims that the Gurugram-based company is profitable in Delhi and the overall business is expected to hit profitability by end of 2021.