aaramshop to raise $12 m, expand overseas

At a time when grocery sites are shutting shop due to lack of funds, online grocery shopping network aaramshop is planning to raise ₹12 million as part of Series A funding, to expand its operations across new markets like Sri Lanka and Dubai.

“We are in an advanced stage of raising $12 million from VC funds by March as part of Series A funding, and offloading between 20-30 per cent stake in the company,” said Vijay Singh, CEO and MD of aaramshop.

Having raised $1 million as seed funding since the start of operations, it is being asset-light, which has helped it get profitable unlike other grocery retailers that have been reeling under losses due to high logistics cost.

“We help digitise local grocers and kiranas by lifting their inventory, but do not bear the cost of delivery. Most of the hyper local grocery players will not be able to turn profitable as their biggest cost is delivery,” observes Singh. While it does charge grocers a miniscule percentage of the sales, the bulk of its revenue comes through FMCG brands themselves and their advertising spends on its portal and app.

Roping in 10,000 small grocers across 90 cities, aaramshop is now planning to emulate its business model across neighbouring countries, with the help of franchises.

“We already have operations in Pakistan and Kenya. Next would be places like Dubai and Sri Lanka as these are countries that have similar shopping practices like our own,” he added.

The start-up exists both as an app and website, and assists in sourcing from the neighbourhood retailer at a discount for a range of grocery and personal care products.

However competition is stiff in this category with hyperlocals like Peppertap and Zopnow apart from existing online grocers, all of whom are struggling to make money in the wafer thin margin led grocery category. But unlike them, aaramshop ensures deliveries are done by the grocers themselves. Of late players like Local Banya, Freshkins, Greenkart have all shut operations while others like EkStop have been acquired by the Godrej Group.

The start-up is also planning to associate with the Reliance Group for its digital wallet, Jio, for its own network of offline retailers. “Since we already have a network of about 10,000 offline retailers, we will help Jio money users to become our customers as transaction costs are lower than a Visa or a Mastercard,’’ he added.

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