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Gurgaon-based hyperlocal grocery service PepperTap has raised Series A funding worth $10 million from SAIF Partners and Sequoia Capital, reports TechCrunch. The funding will be used towards expansion to more cities including Bangalore, Pune, Mumbai and Hyderabad by the end of this year.

Total funding worth $11.2 million so far

It had just raised seed funding worth $1.2 million from Sequoia in February, which was to be used towards expanding across Delhi NCR, scaling operations, adding over 100 employees, product development and creating online and offline brand visibility.

Focus on grocery delivery, not other verticals

With 15,000 stock keeping units (SKUs), PepperTap claims to deliver within two hours of the order. Since it does not own any inventory of its own, the company creates online catalogs for physical retailers and trains delivery personnel to deliver via bikes or cycles. The TechCrunch report adds that PepperTap intends to focus on grocery delivery instead of expanding its categories into other verticals.

Free delivery for users, offline retailers pay commission per transaction

Less than 6 months old, PepperTap was started by Milind Sharma and Navneet Singh in november 2014. It allows a user to buy grocery, fruits & vegetables through the company’s app on Android and iOS. The company offers free delivery on orders above Rs 25 and charges Rs 50 for orders below Rs 250. Right now, it offers only cash-on-delivery as the payment mode but plans to add online, credit and debit card payments. PepperTap excludes delivery charges from its users by charging the stores a commission on each transaction.

E-grocery segment expanding fast

The e-grocery delivery segment in India has been on fire with startups raising funds almost every day. Competition is likely to get strong as each player expands to cities across India going head-to-head. While Flipkart is reportedly considering getting into e-grocery delivery, Amazon has already started KiranaNow to deliver in Bangalore.

Recent developments in this sector include:

This week:

– Earlier today, Grofers raised $35 million from Tiger Global and Sequoia Capital. Less than two months ago, Grofers had raised series A funding of $10 million led by Tiger Global Management and returning investor Sequoia Capital. Earlier this week, the company acquired mobile grocery My Green Box for an undisclosed sum.

– Godrej’s Nature’s Basket tied up with Amazon to deliver the former’s products via Amazon. Nature’s Basket has added a range of gourmet products which can now be sold to over 19,000 pin codes via Amazon which it plans to expand in the coming months. It acquired Mumbai-based online grocery store Ekstop.com in February this year. In March, EkStop was being integrated into Nature’s Basket’s online business.

– Online grocery delivery portal ZopNow raised $10 million in a round of funding led by Dragoneer Investment Group, with participation from existing investors Accel Partners, Times Internet* and Qualcomm Ventures. Currently, it is available in Bangalore, Navi Mumbai, Hyderabad and Pune. The platform will use the funds to expand to 15 cities, invest in technology and for hiring.

Last quarter:

– Earlier last month, Amazon launched an express delivery platform called KiranaNow to make everyday consumer products available to its users in Bangalore. Amazon will partner with local kirana (grocery) stores to offer this service. The service was in a pilot stage in Bangalore and Amazon is likely to launch it in other cities in the future.

– In February, Mumbai-based startup incubation platform AntFarm was to be merged with Meals on Wheels with its yet-to-be-launched grocery and essential products ordering platform Scootsy, in February.

– In January, Mumbai based online grocery store LocalBanya secured an undisclosed amount in Series A funding from a real estate development group Karmvir Avant Group. The platform then expanded to Hyderabad earlier this month, after launching operations in Pune in February.

– Hyperlocal fruit and veggies e-tailer FreshWorld secured an undisclosed amount of investment from Infosys co-founder Kris Gopalakrishnan. The funds would be used to scale FreshWorld’s retail network, upgrade its e-carts and technology.

– SRS Group forayed into e-commerce with the launch of its grocery vertical website, SRSgrocery.com in January. It then catered to users in Gurgaon, Noida and Faridabad.

Last year:

– In November, Reliance Industries retail arm Reliance Retail launched an e-commerce store called RelianceFreshDirect.com to delivery grocery products in some neighborhoods of Mumbai.

– In the same month, e-grocery retailer BigBasket.com opened a new central warehouse in Hyderabad, to enable the company to offer same day deliveries in Hyderabad and Secunderabad. It raised Rs 200 crore investment in a round led by Helion Ventures and Zodius Capital and participation from existing investors Ascent Capital and LionRock Capital.

– Bangalore-based Delyver.com, which raised over Rs 6.5 crore from an unnamed VC fund in the city, connects offline retailers with customers in the neighbourhood and plans to expand to 20 cities this year.

– In September, discount coupon website Mydala.com had launched a grocery vertical for its website and mobile app. The website claimed that the service would allow shoppers to view offers on grocery items from local kirana stores.

– The same month, Bangalore-based online grocery retailer BigBasket raised Rs 200 crore investment in a round led by Helion Ventures and Zodius Capital and participation from existing investors Ascent Capital and LionRock Capital. The company had also raised $3 million from a Singapore-based private investor in April last year.

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