Online grocery delivery company, Grofers has raised Rs 96 crore from its Singapore-based parent company Grofers International, reports The Financial Express. The report mentions that Grofers allotted 269 shares at Rs 1,184,376.62 per share and 542 shares at Rs 1,183,024.056 per share to the parent company. We’ve written to Grofers to learn more about how they plan to utilise the funds, and will update once we hear back from them.
Previously, the company had raised $120 million from SoftBank, Russian entrepreneur Yuri Milner, with participation from existing investors Tiger Global and Sequoia Capital, in November 2015. At the time, Grofers planned to use to funds to further build its merchant ecosystem. In April of the same year, the company had raised funding worth $35 million from Tiger Global Management and Sequoia Capital India, 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 in December 2014.
In July this year, Grofers received the final approval from the Department of Industrial Policy and Promotion (DIPP) to stock food and food products and sell it through both online and offline channels. At the time, the company had said that this approval will now allow it to set up a direct line with farmers, which in turn will reduce wastage and thereby make it possible to offer its customers lower prices, according to this Livemint report. The report also mentioned that food and food products accounted for 70% of Grofers’ sales.
Grofers had applied for approval “to undertake trading including through e-commerce in food products manufactured and/or produced in India” in August last year. This after the government allowed 100% FDI in single brand retailing for the e-commerce sector in June. Note that the government had also relaxed FDI rule that required mandatory 30% local sourcing for opening single brand retail stores for up to three years, and additionally up to five years if the brand proved that its products are “state-of-art and cutting edge’ technology.
BigBasket – Grofers merger?
Earlier this year, in April, reports suggested that BigBasket and Grofers were in talks to merge the two companies. Apparently, Softbank, which is an investor in Grofers, was looking to invest in the merged entity, if the talks were fruitful. However, there have been no further development in this regard. It’s worth noting that BigBasket has just raised Rs 32.65 crore from Helion Ventures Partners, with participation from existing investors Trifecta Capital, Brand Capital, Bessemer Venture Partners, Ascent Capital, among others. This is addition to the Rs 5.5 crore it had raised earlier this month from existing investor Trifecta Capital, which is reportedly an extension of its previous round of funding worth Rs 45 crore in March this year, to meet the capex requirements of the company.