Online grocery delivery startup Grofers is in discussion to raise nearly $60-65 Mn capital from some of its existing investors. However, these funds will be reportedly raised at almost 40% drop in current valuation of the company.
According to business publication LiveMint, two sources familiar with the matter have claimed that this latest fund raising round will be led by existing investors SoftBank and Tiger Global management. Sequoia Capital, one of the early stage investors in Grofers, won’t be taking part in this fund raising round.
During last one and half years, Grofers has been struggling on profitability and revenue fronts. This critical situation aggravated further after lack of fundraising opportunities dried up in the Indian startup ecosystem. This is probably why the Gurugram based company has agreed to take a significant drop on its valuation.
Grofers may have also been forced to expedite its latest fundraising round because its large rival BigBasket recently raised $300 million from Alibaba and other investors. Interestingly, not so long ago Grofers was in talks to sell off its business to BigBasket as well as Paytm. However, these talks failed to fructify into any tangible results.
Currently, Grofers offers its services in less than 20 cities since growing losses forced the company to close down operation in the several non-lucrative cities. A tight balance sheet is now reportedly forcing this Gurugram based company to limit its focus only on few cities, with its major focus being on Delhi/NCR region.
Last year, the startup did manage to raise capital through two fund raising rounds but the money raised was very meager. Even the $60-65 Mn capital that it expects to raise from SoftBank and Tiger Global is equally meager when compared to $300 million raised recently by BigBasket. However, these meager funds will prove handy enough to offer some much-needed breathing space to the company.
So far, the Gurugram headquartered company has managed to raise nearly $180 mn through multiple rounds of fund raising.