Grofers, a low-price online supermarket that provides grocery delivery, said that it is on track to rack up $60-$70 million in new funding, according to an ET report.
Currently, the company has registered a major demand surge with more Indians shopping online for essentials amid a continued nationwide lockdown to stem the spread of the Covid-19 virus outbreak.
Existing investors SoftBank Vision Fund, and others including Apoletto Asia, Sequoia Capital and Tiger Global are expected to back the online grocery retailer. The discussions are, however, not yet final, the sources said.
Despite a rapid growth in business, the capital raising will be at a valuation of around $650 million, not much changed from when it raised money previously, the sources said.
The funding comes at a time when the company’s sales and margins have doubled, compared to the same period last year. It, however, wants to increase cash reserves, said a source familiar with the development to ET.
Grofers expects to clock more than $700 million in annualised gross merchandise value or GMV, for this year, as per estimates drawn on the basis of current uptick, or what is known as a company’s annual run rate, people familiar with the matter said. The company has been able to bring on board 250,000 new customers in April, with the number set to increase to 350,000 in May, said a person in the know.
According to an ET report, the funding will be used by the company to enhance its employee stock ownership plan (Esop) pool by pumping in another $25 million to attract and retain talent.
“We achieved operational profitability in January this year and expect to be Ebitda-profitable for the month of May,” the spokesperson added, without disclosing specifics.
The company said its business operations were back to normal in all cities except Mumbai and Pune, and that it was scaling up to serve even more households in May.
Grofers currently operates in a total of 26 cities across India: Agra, Ahmedabad, Bengaluru, Bhopal, Bhubaneswar, Chandigarh, Chennai, Coimbatore, Delhi NCR, Hyderabad, Indore, Jaipur, Kanpur, Kochi, Kolkata, Lucknow, Ludhiana, Mumbai, Mysuru, Nagpur, Nashik, Pune, Rajkot, Surat, Vadodara, and Visakhapatnam.
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