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Grofers stops operations in nine Tier II cities; now operational in 17


Hyperlocal delivery service provider Grofers has shut down its services in 9 cities citing low acceptance, reports the Mint. The company had expanded to these Tier II cities, including Ludhiana, Bhopal, Kochi, Coimbatore and Visakhapatnam in September 2015. Grofers will now operate in 17 cities.

The company told MediaNama that it felt that some of the smaller cities were not ready for the hyperlocal business yet. It added that the respective city teams, totalling to 20-30 people, have been absorbed and employed in different cities. The company mentions that it ran a series of marketing campaigns including TV ads to help pick up volumes in these cities, but had to shut down as these efforts didn’t work.

Grofers funding: In November, Grofers raised $120 million in a round of funding from SoftBank, Russian entrepreneur Yuri Milner, with participation from existing investors Tiger Global and Sequoia Capital. Note that the company raised funding worth $35 million from Tiger Global Management and Sequoia Capital India in April, less than two months after it had raised series A funding of $10 million. It had also raised an undisclosed amount in seed funding from Sequoia and Zomato founder Deepinder Goyal.

Acquisitions: In September Grofers acquired the B2B logistics service provider Townrush for an undisclosed amount. The acquisition was essentially an acqui-hire with Townrush ceasing to exist as an independent company. Around the same time, Grofers also acqui-hired SpoonJoy for an undisclosed amount. In April, it acquired mobile grocery My Green Box.  At the time, the company said that 60% of its business came from the grocery vertical.

Developments in online grocery vertical:

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– Last month, PepperTap, the Gurgaon-based hyperlocal grocery service, raised $4 million from Innoven Capital. Along with this, it also acquired Jiffstore, a Bangalore based hyperlocal grocery delivery service for an undisclosed amount. In September, PepperTap had raised $36 million.

– The same month, Spencer’s Retail, the supermarket chain owned by the Goenka Group, acquired the online grocery store Meragrocer for an undisclosed amount.

– In November, Indian Grahak, the Kolkata based online supermarket, acquired online hyper-local marketplace Dyscover in a cash and stock deal.

– In October, Flipkart launched a new grocery app called Flipkart Nearby for Android users.

– In September, Delhi-based AUTOnCAB, a cab and auto booking service, acquired the Gurgaon-based online grocery delivery startup BigZop in a stock and cash deal.

– In August, Bangalore-based online grocery store BigBasket raised $50 million in a round of funding. In June, it acquired the hyper local delivery startup Delyver in a cash and stock deal for an undisclosed amount.

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– In July, Ola launched a standalone application for hyperlocal groceries delivery called Ola Store.

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