At a time when eGrocers, both big and small are shutting shop due to non-availability of funds, extreme cash burns due to deep discounting and flawed business models, eGrocery retailer Satvacart today said that it has managed to close third round of angel entrepreneur and investor Nimit Panigrahi joining the current round.
The firm had earlier announced the participation of ad guru Abhijit Awasthi, SP Vijay of Tarento Technologies and Karan Chellani at the beginning of angel round three. Satvacart is backed by Palaash Ventures and has several angel investors including senior executives from insurance, consulting, hospitality and investment Banking sectors.
It sells 4,000 products through an inventory led model with subscriptions, B2C On Demand and B2B as its service offerings. The company is based in and focuses only on the Gurgaon market currently. Satvacart achieved operating level breakeven in March 2016, within a year-and-a-half of its launch.
"The closure of the third round reinforces the validity of our business model and the confidence that we enjoy among investors. With this funding, we plan to enhance our technology and data analytics capabilities to make the business ready for scale up and become self-sustainable, before replicating the business across other geographies. We will be hiring talent across Technology, Data Analytics and Retail for our future expansion and are open to aqui-hiring as well as acquisitions," Rahul Hari, Founder and CEO, Satvacart said.
The company has managed to improve the average revenue per user on a monthly basis by 100% over the past eight months. It has increased wallet penetration in active households to 25 percent as against 13 percent in January 2016. The company is planning to increase it further to over 70 percent in the coming months.
The company claims to be working on almost zero discounting. Its latest investor Panigrahi has ventured into building an exclusive and diversified portfolio of technology ventures which include - Thumbbell, a health and fitness marketplace, Lolchef, a food delivery app and FiFi, an artificial intelligent fitness app.
"I have studied the business models of some of the globally successful eGrocery players such as Ocado and Fresh Direct. The problem is not in the sector but with the business model. I see a huge opportunity in this sector primarily because the entry barriers have now been set. Given the recent shutdowns, it will be extremely difficult for any new player to enter into eGrocery or secure funding. Any future scale-up will happen among the existing players only, who have a sound and sustainable business model. And this is where the value creation opportunity lies," said Panigrahi.
Started around the same time as Grofers and Peppertap in 2014, Satvacart chose to keep its operations within the same city (Gurgaon) inspired by the business model of Fresh Direct in the US.