The startups go through various stages, initially, they are at a baby stage, they receive funding and start their expansion process, then they eventually receive so much funding that their valuation crosses the USD 1 billion mark and they enter the famous “Unicorn Club”. This club is like a golden gate for the startups, post which there is no stopping and the world comes to know the name and the brand. The pandemic year 2020 and 2021 was a bad time for startups with many of them even closing their businesses because there were no customers to buy their product or avail of their service.
The startups had no operations and were unable to conduct their businesses, so they were forced to discontinue their businesses. But this is not true for all businesses and startups. Some startups were able to function and continue their operations successfully as they had an online platform and many were dealing in the essential goods. Some got funding to such an extent that they changed their status to Unicorns. Pine Labs, Nykaa, Zerodha are some of the big names that turned unicorns in the pandemic and the lockdown period.
Now, a new startup is expected to enter the unicorn club. Grofers as announced on June 29, 2021, has been in talks for a deal with Zomato and Tiger Global for USD 120 million. This funding will increase the value of Grofers to over USD 1 billion. Zomato is expected to look for the approval of the Competition Commissioner of India (CCI) to acquire a 9.3% stake in Grofers.
The original story of this funding is as follows-
Zomato which is supposed to release its IPO had been in the news to invest USD 100 million in the Grofers, claiming a 10% stake in the company. This investment round is also expected to have other big names as the participants like Tiger Global and Soft Bank Vision Fund 2. The top leaders of Zomato and Grofers are in close contact and it has been told by a source that both the companies are open to the idea of Zomato holding a majority stake in the company in the coming time. There has been no official statement regarding the same and Zomato has made no comment on it. Zomato had last year also tried to invest in Grofers in order to expand itself in the grocery sector but that plan couldn’t be implemented.
This news has come only a week after the co-founder of Grofers Saurabh Kumar announced that he will make an exit from the startup but will continue to be the shareholder and a board member of the company. According to a report, India has USD 154 million households that engage in transactions and out of which USD 130 million are already using the service of online grocery solutions, thus making it a market that needs a constant address of USD 293 billion.
Founded in July 2008, with headquarters in Gurgaon, Haryana, Zomato has become a household name. The business model of Zomato defines itself to be the Indian multinational restaurant aggregator and food delivery company, which is engaged in providing the menus, reviews of the users, and the information of the restaurants and also provides the food delivery option from its partner restaurants in the selected cities. Founded by Deepinder Goyal and Pankaj Chaddah, the company has been operations internationally also like Sri Lanka, United Kingdoms, Qatar.
In 2019, Zomato had taken over Urbanspoon, which is a Seattle-based food portal, thus marking the entry of the company in the United States and Australia. With this, the main competitors of the company have become Yelp and FourSquare. In COVID 19, Zomato launched its grocery delivery services under the name Zomato Market in more than 80 cities across the country. The company in October 2020 has raised USD 52 million in Series J round which was led by a US Based investment firm, Kora.
Then in February 2021, it raised USD 250 million from five investors which included Tiger Global Management. In January 2021, the company has acquired Uber Eats’ India in an all-stock deal and giving Uber Eats 10% of the combined business. The company has more than 5000 employees and its application supports various languages like English, Turkish, Czech, Italian, Spanish, Portuguese, Polish, Slovac, and Indonesian.
Founded in 2014, with headquarters in Gurgaon as the operational headquarters and Singapore as the legal domicile, Grofers is an Indian online delivery service. In COVID 19, Grofers, Big Basket, and Amazon India were the few online grocery companies that were operating. The funding history of the company is as follows-
In the Series A round, with one investor it raised USD 500K
In the Series B round, with two investors it raised USD 10 million
In the Series C round, with two investors, it raised USD 36.5 million
In the Series D round, with five investors, it raised USD 120 million
In the Series E round, with three investors, it raised USD 58.6 million
In the Series F round, with seven investors, it raised USD 264 million
Founded by Saurabh Kumar and Albinder Dhindsa, Grofers has more than 2000 employees and had a revenue of USD 34 million in 2019. The founders currently have 8% of the share of the company and the rest is majorly held by SoftBank. The startup has so far raised USD 662 million in various debts and equity rounds. The names in its list of investors include Sequoia Capital India, Bennett Coleman and Co Ltd, Abu Dhabi Capital Groups, SoftBank Vision Fund, and Trifecta Capital Advisors.
Now, let us wait and watch if this deal is approved and what changes these two big names will bring to the e-commerce industry.
Edited by Aishwarya Ingle