RedMart, an online grocery service in Singapore, has closed a $26.7 million round in preparation for an upcoming Series C which will be used to expand across Southeast Asia.
The round was led by existing investors Garena, SoftBank Ventures Korea, Visionnaire Ventures, and Facebook co-founder Eduardo Saverin. The company said new investors, including Far East Ventures, participated too. This fresh injection means four-year-old Redmart has raised over $50 million from investors.
“We’re planning a much larger Series C round later this year, this bridge round gives us plenty of runway and capital for the current initiatives, such as our grocery marketplace, and building out an on-demand marketplace,” RedMart CEO and co-founder Roger Egan told TechCrunch in an interview.
Egan declined to reveal how large the upcoming round might be, nor did he say which cities the company is looking to move into.
Drawing on high-profile startup failures in the grocery and delivery space, Egan said RedMart has been patiently working on its core business in Singapore before entertaining the idea of expanding its horizons.
“The vision is to go into other product categories and provide near instant delivery, and we’re building towards international expansion,” Egan added. “We haven’t expanded yet because groceries is a difficult category. [U.S.-based startup] Webvan, for example, didn’t understand how to make money, and grew too quickly. A lot of that team went to Amazon Fresh, and stayed in Seattle for over four years and only recently have they been expanding. We’ll be able to expand faster now that we’ve spent four and a half years learning this business.”
Unlike newer e-commerce and on-demand companies, RedMart owns its logistics and warehouse chain. That, Egan argued, gives it a position of strength when it comes to venturing into other product categories — particularly given the complexities associated with grocery delivery, where the average customer basket is a lot higher than say fashion or electronics products.
“Starting with groceries gives us a big advantage when it comes to being the store for everything,” he added. “It’s easier for us to move into other categories, rather than an e-commerce firm move into groceries.”
Aside from revealing the new funding, RedMart also announced that former Amazon executive Colin Bryar has become its new COO. Co-founder Vikram Rupani, who had held the COO and CFO roles, is shifting to President. Egan said that Bryar, who spent two years as technical advisor to Amazon CEO Jeff Bezos, would be responsible for commercial, operations, engineering, and marketing at RedMart.
Amazon may be in the news for all the wrong reasons right now, but Egan — who has a number of former Amazon staff at RedMart — said “there’s a lot to admire about Amazon, in terms of their focus on the customer and innovation.”
In terms of RedMart’s own business right now, the company said only that it offers 15,000 products across its B2C service and marketplace, a platform for small and independent grocers in Singapore to reach customers via the web.
“Our business [GMV, partners and SKUs] is growing 12-15% per month, so clearly there’s still a lot of pent up demand in Singapore,” Egan said. “Our marketplace is growing extremely rapidly, and it could soon eclipse our B2C service.”
“All our metrics are trending in right direction and there’s a clear path to profitability, but as long as you can grow in a sustainable way, you should keep on investing in growth — and that’s what we’re doing,” Egan added. “Everyone thinks Singapore is a small market, but groceries here are worth $16 billion a year — you can build a multi-billion business in just groceries and just Singapore.”
Launching overseas from scratch will be a new challenge for Redmart, despite its learnings in Singapore, and Egan said it will start off slow at first. Over time, he said, the company hopes to be in “a few” more cities in Southeast Asia.