Gurugram-based online grocery retailer Satvacart said Tuesday that it turned cash positive over March and April, as more people order grocery at home amid the ongoing Covid-19 pandemic.
Following a micro-cluster based model whereby it maintains a completely independent, tech-enabled warehouse in the centre of a 5 km cluster, Satvacart ensures a delivery slot every 30 minutes seeing to it that the customer gets its delivery within 60 minutes of the order getting placed.
The firm will begin geographical expansion by March 2021, targeting a two-city model, and is open to acquisitions for expansion.
Set up in the year 2014 by Rahul Hari, a former strategy consultant with EY and Cleartrip, and Deepika Saxena, former product design and development engineer with Oracle, Satvacart was the first to launch milk subscriptions in Gurugram. It was also the first online grocery player to turn the business profitable at operating level as far back as March 2016. However, it pivoted from milk subscriptions to an inventory led instant delivery model of grocery in search of the right metrics moving towards profitability.
“We have always believed in getting metrics right for a single unit of the business, however small the scale may be. Achieving an EBITDA positive proves our hypothesis and ensures the business is in a state where the more money we invest, the more return it generates,” said Rahul Hari, Founder, Satvacart.
Sameer Bagul, a member on the Board of Satvacart said, “Current environment post Covid-19 has increased the demand for online groceries, which is natural as people are staying home. However, this will be new normal as people have realized the benefits of ordering online and will be more comfortable henceforth.
“We have been working with a hypothesis to create an order processing black box that is completely independent of people skills and can operate wherever we put it – be it Gurgaon, Delhi, Mumbai, London or New York. The current achievement confirms creation of this unit. It can be replicated anywhere across the world, similar to the Pizza delivery multinationals,” said Saxena.
Focusing on a single geography and cracking the viability part before increasing the scale has been the operating principle of Satvacart.
Achieving profitability will allow the company to expand into new clusters and geographies faster, said the firm.
Aman Gupta, Managing Partner, Strategic Partners Group (SPAG Asia), an investor in Satvacart, said, “We are extremely happy with the performance Satvacart has shown over the past six years. With right decisions, the company has not only managed to survive in a tough market with heavily funded players, but has also attained full profitability with a solid business model."