Softbank Plans Further Investment In Grofers, This Time Via Its Vision Fund
SoftBank is planning to increase its stake in online grocer Grofers, this time through its vision fund, according to two people familiar with the matter.
Japan’s SoftBank, which had invested in the grocery startup in March, is looking to lead a $100-150 million round, at almost double the valuation of around $550-650 million, the people said.
Existing investors such as Tiger Global Management, Russian billionaire Yuri Milner’s fund—Apoletto Asia—and Sequoia Capital may participate in the round, with Softbank Vision Fund putting in 70 percent of the capital, the people cited earlier said. There are also talks of bringing in a new investor as the firm is trying to close a round at $200 million, according to one of the persons cited earlier.
The investment talks renewed after talks of Grofers’ merger with Bigbasket led by Alibaba Group Ltd. failed, one of the persons cited earlier said.
The fresh investment by Masayoshi Son-led Softbank’s Vision Fund into Grofers signals the growing competition in India’s grocery space, that is now a four-way war with pure-play platforms such as market leader BigBasket and Grofers on one side, and e-commerce giants like Amazon and Flipkart on the other. All of them eyeing for a pie of the retail market, is expected to be worth $1.1 trillion by 2020. according to a report by Assocham and MRRSIndia.com.
The fresh investment is coming seven months after the SoftBank group led a near-$60 million (around Rs 400 crore) investment in the startup, but at a lower valuation of around $300 million.
SoftBank declined to comment. Grofers and Tiger Global, didn’t immediately respond to emails seeking comments. The Economic Times newspaper first reported on the investment talks.
Grofers, which transitioned from a hyperlocal model to an inventory-led model two years ago, is said to clock daily orders of 46,000 with an average size of about Rs 1,300. The firm is now betting on low-priced brands, that will be about 5 to 50 percent cheaper than the market price of popular brands. Private labels contribute about 28% to the e-grocer’s overall sales.