The Sun Is Shining On Grofers Again

Grofers is looking to strengthen its operations after the latest funding round led by Masayoshi Son’s SoftBank.

- Gauri Chauhan And Debabrata Das

VENTURE

LESSONS LEARNED IN TIMES of adversity keep one in good stead. Take grocery delivery service Grofers. Less than two years after its launch in 2013, Grofers found itself in the middle of intense competition—from Sequoia Capital-backed PepperTap to Flipkart’s Nearbuy, everyone wanted a piece of the online grocery business pie. More than 300 firms cropped up, says Traxcn Technologies data, but many shut shop despite the backing of deep-pocketed venture capital firms. BigBasket and Grofers were among the few that managed to stay afloat.

Many startups perished because of the hyperlocal model which depends on local kirana shops for sourcing, rapid expansion without a robust supply chain, and inefficient technology. Grofers’s situation, too, was far from safe. According to filings with the Ministry of Corporate Affairs (MCA), the company posted Rs 225 crore in losses in 2015-16 on revenues of Rs 14 crore. In June 2016, a month after Peppertap announced it was closing down its online grocery delivery service, Grofers shut down operations in nine cities, triggering talks that it, too, would follow suit.