Grofers, An On-Demand Delivery Service For Indian Cities, Raises $10M From Sequoia And Tiger Global

Large marketplaces like Flipkart, Snapdeal, and Amazon are benefitting as India turns into one of the world’s fastest-growing e-commerce markets, but many brick-and-mortar stores are missing out on the boom. A startup called Grofers wants to help local shops by not only providing them with a mobile platform for their inventory, but also facilitating on-demand delivery within 90 minutes.

Grofers’ business strategy is ambitious, but the startup just got a vote of confidence in the form of a $10 million series A round led by Sequoia Capital (a returning investor) and Tiger Global. This brings its total raised so far to $10.5 million.

Co-founder Albinder Dhindsa tells TechCrunch that the capital will allow the service, which is currently available in Delhi and Mumbai, to expand into more cities, with Bangalore first on the list. Grofers will also improve its technology to make it easier for merchants to upload and manage their goods.

Dhindsa says Grofers takes the business model used by restaurant-delivery apps, a fast-growing and competitive sector in India, and applies it to other businesses. The company currently focuses on grocery stores, bakeries, and fresh produce, and plans to add other products, like electrical appliances, soon. While there are other online grocery stores, like, Grofers’ main value proposition is its promise of on-demand deliveries, which are carried out by 200 staffers (the company will hire more people as it expands).

The Gurgaon-based company, which was founded in December 2013, currently works with 250 vendors and has a total of 500,000 SKUs (or individual items) available for order. Grofers claims to process 30,000 deliveries a month, with a fifth of those orders placed through its mobile apps.

Since many of the small merchants Grofers works with have never sold online before, the company sends a team to take photos of products and upload them to its platform. The process takes about three or four days, depending on large the store is.

The biggest challenge facing the startup as it expands into new cities is the labor-intensive process of adding shops, but Dhindsa says Grofers’ future plans include improving its technology to make it easier for stores to manage orders, track inventory, and upload new products by themselves. After Bangalore, it hopes to expand into other major cities soon, including Hyderabad, Chennai, and Calcutta.