Gurgaon based online grocery startup Grofers has received $10 Mn from Abu Dhabi Capital Group (ADCG), according to latest regulatory filings sourced by Paper.vc. The latest capital infusion is part of the ongoing funding round that helped Grofers raise $200 Mn from Softbank & South Korean investment firm KTB in May.
Reports are rife that ADCG may pump more capital once the ongoing funding round officially closes. The Gurgaon headquartered company so far has not released any official statement on the latest fundraising round.
The fresh capital infusion has given rise to some confusion over Grofers’ market valuation. When Softbank & KTB invested $200 Mn in May, company’s valuation had reportedly propelled beyond $1 bn to become the latest entrant in the prestigious unicorn club. However, the latest reports claim the valuation of the company to be around $700 Mn.
Grofers recently announced it would convert scores of Kirana stores around Delhi-NCR region into its own branded outlets. This would help the company to push the sales of its own private labels and thereby earn better profit margins.
The Softbank backed grocery online firm is locked in intense competition not only against primary competitor BigBasket but also full-fledge e-commerce players like Flipkart and Amazon. Both Flipkart and Amazon are investing millions to achieve sizable tractions in the online grocery market. But wafer thin margin and high operational cost makes online grocery business a pretty tricky affair even for well-funded players.
Industry experts claim that only those players that keep their operational cost under control and maintain their balance sheet will eventually emerge as winners. With such challenging market conditions, task of every online grocery player is cut out.
With two back-to-back fundings, Grofers will be certainly well positioned to cope with tough market conditions and compete with its deep pocket competitors.