Milkbasket acquires Veggie India

Micro delivery startup Milkbasket has acquired Noida based online grocery venture Veggie India for an undisclosed amount. The acquisition would strengthen its distribution capabilities and grow its customer base to more than lakh households.

Ocado Garden Fresh Pvt Ltd, which operates Veggie India, was founded in January 2017. Veggie India, which operates a mobile app, helps users choose from more than 3,000 products including fruits and vegetables, organic products, packed and frozen food, beauty and hygiene products, and kitchen and household essentials. The app claims to have more than 5,000 users primarily from Noida and Ghaziabad.

The buyout comes months after Milkbasket raised $7 million (Rs 49 crore) in an extended Series A round led by US-based early-to-growth-stage venture capital firm Mayfield Advisors. Founded in 2015, Milkbasket currently has a presence in Delhi, Gurugram, Noida and Bengaluru.

Unlike bigger players in the online grocery delivery market such as BigBasket, Grofers, Amazon and Flipkart, Milkbasket positions itself as the online version of local mom-and-pop grocery stores but with more stock keeping units. It generally supplies perishable and non-perishable products that are bought in smaller quantities but with higher frequency.

Foodpanda in talks to buy Holachef

Foodpanda, the online food ordering and delivery marketplace owned by Ola, is in advanced talks to buy Mumbai based food tech startup Holachef Hospitality Pvt. Ltd, which shuttered operations nearly three months ago. Foodpanda will acquire Holachef Staff, brand name and kitchen equipment.

A potential acquisition would be the second within a year for Ola, India’s largest taxi aggregator. Last December, the company, run by ANI Technologies Pvt. Ltd, bought Foodpanda from its German parent. A potential deal signals Ola’s aggressive expansion to compete in the online food ordering and delivery segment alongside players like Swiggy (Bundl Technologies Pvt. Ltd), Zomato (Zomato Media Pvt. Ltd) and the recent entrant UberEats India.

Founded in 2014, Holachef, which delivers home-cooked food to customers, closed operations in April. The startup’s Twitter handle is flooded with customer queries about its sudden absence from delivery platforms. Holachef, which was operational in Mumbai and Pune, had raised ₹ 2 crore from diamond merchant Ashok Kumar in February this year. The company backed by Ratan Tata, Kalaari Capital and venture capital fund India Quotient has raised $9.6 million cumulatively till date.

Ola was also exploring creating an independent food technology company on the lines of Flipkart’s model and was in talks to buy food brand FreshMenu (Foodvista India Pvt. Ltd) along with another private label. Holachef joins the likes of Gurugram-based Twigly that three weeks back shut operations after being in business for three years. Among other food-tech businesses, Spoonjoy (acquired by grocery delivery firm Grofers), TinyOwl, Yumist and Dazo had to shut shop as raising funds amid immense competition became increasingly difficult.

Tata Group to acquire GrocerMax

The Tata Group is buying out the management team and technology infrastructure of Gurgaon based GrocerMax to enter the online grocery business as consumers increasingly place orders for their supplies over the internet.

The new team will help set up the online platform for Trent Hypermarket, an equal joint venture between Tata and British retailer Tesco that will rival Amazon and Bigbasket in the nascent yet rapidly growing segment. GrocerMax will shut down its business in Gurgaon because the Tata group's grocery business is not present in North India. The Tata Group runs three formats under the Star Banner – Dailies, Market and Hyper and has around 42 stores.

For Tesco, the world’s third largest retailer has nearly 6,800 stores globally, its online business earns roughly 3 Billion in sales and is one of the rare such ventures that’s profitable. But the opportunity offered by the $500 Billion retail market is attractive for any player, foreign or local. Food and grocery account for almost 50% of the overall retail basket in India, although general merchandise, personal and home products fill up a bulk of the retailer’s profit pool.

Experts feel omnichannel retail offers consumers more ways to shop and interact with a retailer. GrocerMax is a hybrid platform for grocery that keeps only 10% inventory, sourcing the rest from supermarkets and provisional stores in real time. The online grocery space in India, which has seen a minor shakeout over the past year, has attracted more players as well. While LocalBanya and PepperTap suspended operations, Grofers shut in multiple cities.

CraftsVilla Acquires Sendd

CraftsVilla, an online marketplace for Indian products, has acquired the on-demand shipping service provider Sendd for $4.5 Million. Post-acquisition, Sendd will continue to operate independently and offer its services to other firms as well. CraftsVilla will use the acquisition to strengthen its logistics capabilities.

Founded in April last year, Sendd allows businesses to send parcels to 20,000 pin codes across India. It provides packaging, branding and insurance policies for parcels and provides an API for partner integration. The company also claims to provide reverse pickups and international shipments across all countries.

CraftsVilla was founded in 2011. It takes a 20% commission on the products sold; however, it is not clear if the company does this on per item or per order, which might include many items. The company claims to have 25,000 sellers on its platform, along with 3.5 Million sold products. In November last year, CraftsVilla raised Series C funding worth $33.3 Million after the company raised Series B funding worth $18 Million in April the same year.

Last year saw a consolidation in logistics services with various companies getting acquired or invested in by business customers or competitors. Flipkart acquired strategic minority stake in MapmyIndia to pad its supply chain and logistics operations. Grofers had acquired Townrush. Snapdeal invested in GoJavas.

Grofers Acquires Townrush

Hyperlocal delivery startup Grofers has bought business-to-business logistics service provider Townrush, closing its second acquisition within a week. Earlier this week, Gurgaon based Grofers had acquired SpoonJoy. Both acquisitions are essentially acqui-hires where a company is bought for the team instead of its existing business.

Founded in May this year, Townrush had raised an undisclosed amount in a seed round from Lightspeed Venture Partners. Grofers is one of the most well capitalized start-ups in the Hyperlocal delivery segment, having raised $45 Million from Sequoia Capital and Tiger Global Management. Grofers is making these acquisitions primarily for the teams with no significant cash or equity being exchanged.

Townrush closed down in six months. The company used to compete with Roadrunnr, Parcelled, Shadowfax, and Grab, among others. At least 20 such start-ups have emerged in the last 10 months, making it an overcrowded space. However, only Roadrunnr and Shadowfax have raised any significant capital, mopping up $11 Million and $8.5 Million.

Hyperlocal delivery saw a huge amount of ventures spring up this year but many have found it difficult to raise follow on capital. The unit economics in the delivery business is a big challenge. In 2015, as many as 290 startups received seed funding, up almost 90% from last year, but follow on rounds have been muted despite the glut in initial rounds.

Grofers to acquire SpoonJoy

Hyperlocal delivery startup Grofers is in talks to buy Bengaluru based SpoonJoy, as the food ordering app struggles to raise money from new and existing investors. Grofers, run by Locodel Solutions Pvt. Ltd, is expected to sign a acqui-hire deal with SpoonJoy. Operations of SpoonJoy will be shut down once the deal is done.

As investor interest starts to ebb in the crowded food ordering sector, the market is expected to see more such consolidation or strategic investments. Since the start of the year, investors have pumped $150 Million into 20 food ordering startups. The acquisition of SpoonJoy is expected to largely to be a stock deal with some component of cash being involved.

About 40 people from SpoonJoy are expected to join Grofers in the tech and operations departments. SpoonJoy was launched in July 2014 by IIT graduates. The company is backed by Flipkart co-founders Sachin Bansal and Binny Bansal. In May, the company raised $1 Million in a Series A funding from SAIF Partners.

There are early signs of a slowdown and startups in overcrowded sectors will either fail to get higher valuations in their next rounds or not find fresh funds, leading to cost cuts and consolidation over the next one year. However, Food tech companies will not disappear, given the large markets for home deliveries in large cities.

BigBasket acquires Delyver

Founded in December 2011, BigBasket is an online grocery store. BigBasket has acquired logistics startup Delyver in a cash and stock transaction to bolster its capacity to deliver fast and compete with agile players in the segment like Grofers, PepperTap and LocalBanya. BigBasket will employ Delyver orders in 90 minutes.

BigBasket is likely to leverage Delyver expertise in hyper local delivery to roll out one hour delivery services in the six cities in which it is present i.e. Bengaluru, Hyderabad, Chennai, Delhi, Pune, and Mumbai. It was a cash and stock deal with 50% of the amount being paid in cash. Delyver will continue to operate as a separate business while Big Basket will deploy its fleet of two-wheelers to facilitate timely delivery.

Delyver will scale to the 50 cities as and when Big Basket enters a new market. Delyver specializes in delivering orders within one hour from stores across categories such as food, vegetables and flowers. It will continue with its existing categories instead of restricting itself to just groceries. The hyper local avenue is witnessing a surge of innovations as more and more players are entering the field.

With technology snowballing or advancing to higher levels, the scope for these players is rendered wide open; the potential of this segment is estimated to be so high that even the big fish in the market have registered themselves to compete. While Amazon India has already made an entry into the Indian market with its Kirana Now, Ola has started its pilot project to deliver groceries.