BENGALURU: Online grocer
Grofers
is closing a $280-million (nearly Rs 1,970-crore) funding that would see its valuation rising to around $700 million.
SoftBank
’s
Vision Fund
is leading the investment in the six year-old startup that competes with Alibaba-backed Bigbasket and horizontal players like Amazon India and Flipkart.
Grofers said it has received over $200 million in this round with South Korean investment firm
KTB
joining as a new investor. A person aware of the matter said a Middle East-based investor is likely to join the round, which will take the total size of the fund-raise to nearly $280 million. It will take another two-three months to close that, this person added.
For Grofers, once the round closes, this would be a significant gain in valuation since it last raised funds in a down round at the beginning of 2018. Essentially, a down round is when a company raises new capital at a lower valuation than the previous round. Prior to this, the Gurgaon-based startup had raised around $200 million from investors such as
Tiger Global
and Sequoia Capital besides SoftBank.
Earlier in the month, Bigbasket closed its $150-million financing round, which made it a unicorn (an industry moniker for startups valued at $1 billion or more).
Both the players have explored mergers in the past, but the talks haven’t fructified yet.
Grofers, which now focuses on the bi-monthly replenishment segment, would see a larger play with its private label products that will be about 70% of its total volumes by 2020, up from 50% currently. Grofers, which decided to junk its hyperlocal delivery model, launched its paid subscription programme last year in January. It has 5 lakh subscribers who drive 70% of Grofers’ volumes.
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