 "LocalBanya aims to raise $15 million in the next quarter")
The company has raised about $20 million in three rounds, one of them about a quarter ago. “We’ll need another round of cash infusion to go national. Talks have been initiated, but details of funding, including equity structure, are yet to be worked out,” said Karan Mehrotra, chief executive officer and co-founder of LocalBanya.
Founded in 2012, LocalBanya raised $5 million from the Mumbai-based real estate developer Karmvir Avant Group last year. In 2013, it raised an undisclosed amount from Bennett Coleman & Company Limited’s Springboard fund. Prior to this, the company also received angel funding from a few investors.
LocalBanya is projected to close the financial year ended March 2015 with a revenue of Rs 40 crore, according to industry sources. Mehrotra declined to comment on revenue details.
Over the next three to four months, Mehrotra said LocalBanya would cover most big cities across India. “We operate a model which does not require much physical infrastructure. We connect with existing retailers and grocery stores. We do not compete with them. We work with them, adding the online channel to the existing vertical,” he added.
LocalBanya competes with well-funded companies like BigBasket and MyGrahak It has plans to tap Tier-II and Tier-III cities soon. “We may need to tweak our model in each of these smaller markets,” Mehrotra said.
It has run a pilot in Pune and will start offering services there in two weeks. Next will be Delhi and Hyderabad, followed by Bengaluru, Chennai, Hyderabad, Ahmedabad and Kolkata. The fresh round of round of funding will mainly be used for this expansion.
According to Mehrotra, the challenge is to build robust last-mile infrastructure. Most of the investments for companies like Localbanya, said an analyst tracking e-commerce, go into territory expansion and getting the logistics ready.
LocalBanya makes about 850-900 deliveries a day in Mumbai with an average bill size of Rs 1,600. The portal offers over 14,000 products.
Earlier this week, technology giant Google and consultancy firm Bain & Co, in a joint study, said online sales in the fast-moving consumer goods category would reach $5 billion (Rs 30,000 crore) by 2020. This would make up about 5 per cent of total FMCG sales in the country.
The grocery market in India is estimated at $10 billion and is growing at about 7-8 per cent annually. According to a 2013 report by consulting firm Technopak, grocery accounts for about 69 per cent of the $490 billion Indian retail sector.
RAW AND FRESH
- Rs 40 crore
The projected revenue LocalBanya.com will have in the financial year ended March, according to sector sources
- LocalBanya.com,
which competes with well-funded companies such as BigBasket.com and MyGrahak.com, plans to tap the Tier-II and Tier-II cities soon