Abu Dhabi Capital Group backs Grofers

BENGALURU: Abu Dhabi Capital Group (ADCG) has invested $10 million in online grocery startup Grofers, joining the likes of SoftBank’s Vision Fund, according to regulatory documents sourced from Paper.vc.
Earlier in May, Grofers had announced raising over $200 million in a new financing round led by the Vision Fund with participation from South Korean investment firm KTB.TOI had mentioned a new investor from the Middle East was in final stages of talks to invest in Grofers, which competes against Alibaba-backed Bigbasket and horizontal e-commerce player like Amazon and Flipkart.
Grofers co-founder and CEO Albinder Dhindsa was not immediately available for a comment on ADCG’s investment in the online grocer. ADCG might put more capital once the round, estimated to be total $280 million in size, formally closes. Grofers is expected to be valued at around $700 million after this fund-raise.
Both Flipkart and Amazon, which has a bigger grocery business than Flipkart, are trying to scale up to maintain stickiness of their consumers to the platform. Grofers, which now focuses on the bi-monthly replenishment segment, has started to turn offline grocery stores into its branded outlets where it manages their back-end sourcing, inventory, etc.
According to reports, it plans to have 200 such stores with its branding across India. Grofers aims to generate about 70% of its total volumes by 2020, from the current volume of 50%. Grofers, which decided to junk its hyper-local delivery model, launched its paid subscription programme last year in January. In May, it had about 5 lakh subscribers who drive 70% of Grofers’ volumes.