Exclusive: Micro-delivery grocery firm Milkbasket raises fresh funds from Mayfield

Gurugram-based micro-delivery grocery service Milkbasket has raised closed to Rs 10 crore ($1.37 million at current exchange rates) in a fresh funding round from US-based venture capital firm Mayfield Fund, two persons directly familiar with the development told TechCircle.

Aaidea Solutions Pvt. Ltd, which operates Milkbasket, raised this sum from Mayfield India. Nikhil Khattau, managing director at the VC firm also joined the startup’s board as part of the deal, one of the persons mentioned added.

The other person mentioned above said that Milkbasket raised this sum at a valuation of $22-23 million (Rs 161-168 crore). It is not clear whether this capital raise is part of a larger funding round or an extension of the startup’s Series A round announced in May this year.

E-mail queries sent to Anant Goel, co-founder and chief executive of Milkbasket, and to Mayfield Fund India, seeking more information on this investment round did not elicit a response at the time of filing this report.

In May this year, Milkbasket raised $7 million (Rs 47 crore) in a Series A funding round led by early-stage investment firm Kalaari Capital.

In January this year, it secured $3 million (around Rs 19 crore) from Unilever Ventures, the investment arm of FMCG major Unilever, with participation from existing investors.

US-based Mayfield, which typically participates between the seed and Series A stages, has been investing in India since 2006, according to information available on its website. Its focus areas include consumer and business sectors across non-tech, tech-enabled, and technology verticals.

Its other investments in India include digital lending Lendingkart, meat and fish ordering platform Licious, food-tech startup Box8, logistics startup Emiza, cloud-based telephony services provider Knowlarity, online trip planning platform Triphobo and ad-tech firm Amagi among others.

Milkbasket

The venture was founded in 2015 Goel along with Ashish Goel, Anurag Jain and Yatish Talavadia. Unlike larger players in the online grocery segment like BigBasket, Grofers, Amazon and Flipkart, Milkbasket positions itself as the online version of local mom-and-pop grocery stores, only with more stock keeping units.

BigBasket, Grofers, Amazon and Flipkart lean towards fulfilling the ‘stock-up’ needs of a household, which are planned and are bought less frequently, usually from bigger format stores. Milkbasket caters to the top-up fulfillment needs of a household, which refers to items bought at a higher frequency, at a lower volume and fulfilled by the local ecosystem. It leans more towards perishables, but also includes a lot of non-perishables.

The three-year-old startup, which started off by delivering milk, bread and eggs, has since expanded its business to a whole range of daily groceries and now gets more than 11,000 orders a day, having more than 5,000 SKUs. Recently, the company has also expanded its operations to Noida, according to information available on its website.

In a recent interaction with TechCircle, CEO Goel had stated that Milkbasket hoped to expand its services to India’s top 10 cities over the next two years, as part of its long-term expansion plan.

In 2016-17, the startup’s revenues from operations jumped nearly 84 times to Rs 10.46 crore, from Rs 12.45 lakh in the previous financial year, according to VCCEdge, the data and financial research platform of News Corp VCCircle.

Likewise, gross expenditures also rose nearly 25 times rise to Rs 14.52 crore, up from Rs 58.10 lakh in the previous year. Consequently, losses widened to Rs 4.05 crore, up from Rs 45.65 lakh the previous year.

Deals in the space

The online grocery sector in India currently has larger well-funded players like Amazon, Flipkart, BigBasket and Grofers, who have achieved a certain amount of scale and penetration. Besides these, others like Milkbasket and Doodhwala have strong operations in selective markets.

Last month, The Economic Times reported that Grofers was in talks to raise around $150-200 million from existing investors SoftBank, Tiger Global, Russian billionaire Yuri Milner and Sequoia Capital. Metro AG, the German retail group, is expected to be the new investor in this round.

In September, US e-tailing behemoth Amazon along with mid-market private equity firm Samara Capital signed an agreement to buy Aditya Birla Retail Ltd’s (ABRL) food and grocery retail chain More.

In February this year, SuperMarket Grocery Supplies Pvt Ltd, which owns the BigBasket brand, raised $300 million (around Rs 1,921 crore) in a Series E round of funding led by Chinese e-tailer Alibaba.

In the same month, Bengaluru-based Banger Tech Pvt. Ltd, which operates subscription-based milk and daily essentials delivery startup Doodhwala, raised $2.2 million (Rs 14.27 crore) from impact venture fund Omnivore.