Online grocery startup Grofers lands $200M led by SoftBanks Vision Fund

Hot on the heels of Indian delivery startup BigBasket raising $150 million at a unicorn valuation, no less so its close rival Grofers has also pulled in capital after it announced a $200 million raise to battle its local competitionand international giants Amazon and Walmart.
The round is the largest in Indias online grocery sector to date, and it was led by SoftBanks Vision Fund, which continues to make major bets on the nations growing internet economy. KTB, and existing investors Tiger Global and Sequoia Capital also took part.
Five-year-oldGrofers works with more than 5,000 stores in 13 cities in India. In an interview with TechCrunch, AlbinderDhindsa, cofounder and CEO of Grofers, said the startup willuse the fresh capital to expand to new markets and bring its service to hundreds of millions of Indian consumers, although he didnt specify exact launch cities.
Dhindsa said that Grofers does not want to expand to new cities for the heck of it. Instead the startup focused on entering a city and growing its business profitable there. Grofers is already profitable in Delhi and will soon be profitable in Kolkata, he said. In Southern Indian markets such as Bengaluru, the startup is working to gain foothold.
The startup is rivaled by a number of players, including BigBasket, which raised its round earlier this month from Mirae Asset-Naver Asia Growth Fund, the U.K.s CDC Group and Alibaba. The duo also faces competition from hyperlocal player Dunzo, and delivery startup Swiggy, which recently entered this grocery delivery space.
However, more concerning for them is the growing ambitions of Amazon India and Walmarts Flipkart, both of which are quickly expanding their businesses in India. Amazons Pantry and Prime Now services jointly have a presence in more than 100 cities, while Flipkart Group CEO Kalyan Krishnamurthy has publicly expressed an intention to pilot a fresh foods business in the nation. Dhindsa argued that these players are not really a significant competitor to Grofers yet.
The foods and grocery market is growing in India. According to some estimates, it will reach $869 billion in sales in 2023 with digital-based services seen as an important vector for growth. This is likely only the start now that SoftBanks Vision Fund has entered the space through this deal with Grofers.
Other investments in India from the near-$100 billion fund include budget hotel startup OYO, which has now ventured into Europe, Flipkart although the fund exited after the Walmart sale Paytm, and PolicyBazaar. With reports suggesting the fund will open a dedicated office in India, you can bet that theres a lot more to come.
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