It’s been a good couple of months for grocery delivery startups in India, at least for funding. PepperTap announced today that it has raised a $10 million Series A from SAIF Partners, as well as Sequoia Capital, which invested a $1.2 million seed round in the Gurgaon-based startup just last month.
Other on-demand grocery startups that have recently received backing include ZopNow, which announced $10 million in new funding this week, and Grofers, which just received an additional $35 million from Tiger Global and Sequoia. (Grofers doesn’t focus exclusively on groceries, but it is one of its most important and fastest-growing verticals).
Like its competitors, PepperTap is pouring its new capital into an ambitious expansion plan that will bring its services to 10 more cities by the end of this year. PepperTap launched its services in Gurgaon before expanding to Delhi and Noida last month. The new cities it plans to enter include Bangalore, Hyderabad, Pune, and Mumbai.
While PepperTap faces plenty of competitors (in addition to Grofers and ZopNow, other grocery delivery services include established players Big Basket and LocalBanya) on top of the challenges of operating in an industry with very tight margins, founder Navneet Singh says that his company has an edge because of his background in logistics. Before PepperTap, Singh launched Nuvoex, which provides delivery services for major e-commerce companies like Snapdeal, Flipkart, and Jabong.
In an interview with TechCrunch last month, Singh says PepperTap does not keep its own inventory and instead focuses on creating online catalogs for stock from local retailers and training delivery staff to provide quick service on scooters or bicycles. It plans to stay focused on grocery deliveries instead of expanding into other verticals to keep the business streamlined.
PepperTap says it currently has more than 15,000 SKUs and that deliveries are made within two hours.
In a prepared statement, SAIF Partners managing director Ravi Adusumalli said “Grocery in India is a huge market and grocery shopping on mobile is already seeing strong adoption. We believe that PepperTap’s hyperlocal marketplace approach is the most efficient way to cater to this market, and can scale up very rapidly.”
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