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[UPDATE] Grofers Shuts Down Operations In 9 Cities

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It has been a bumpy ride for the Gurgaon based on-demand delivery up start Grofers. The company, that was earlier operating in 27 cities starting 4 months ago has come back to 17 cities on Monday. Akhil Agrwal of Grofers got the news out by tweeting on Monday afternoon, and the same has been confirmed to us by the team.

4 months back @Grofers expanded to 27 cities. It’s back to 17 cities now. Closed Bhubaneswar, Aurangabad, Bhopal, Kochi & others #startupthe tweet reads.

The company is currently operational in Agra, Ahmedabad, Bangalore, Chennai, Chandigarh, Hyderabad, Indore, Jaipur, Kanpur, Kolkata, Lucknow, Mumbai, Delhi– NCR, Nagpur, Pune, Surat and Vadodara, which accounts for 17 cities. Operation was shut down in Bhopal, Bhubaneswar, Coimbatore, Kochi, Ludhiana, Mysuru, Nashik, Rajkot and Visakhapatnam.

Apparently, the above mentioned cities were unlisted because the company did not see much uptake. The employees who were working at these locations have been offered positions in other cities. In a detailed response to The Tech Portal, Grofers said,

A few cities were part of our experimentation and we wanted to know how these markets respond to our offering. We are currently re-assessing our operations in these cities, and will be temporarily closing down our services.

While Grofers is calling this a temporary shutdown, you can expect operations to remain closed in these cities largely because all of the employees in these particular cities have been absorbed into other cities. The team says,

The respective city team​s​ have been absorbed and employed in different cities. 

Operations saw a short interruption in October 2015 in NCR, Delhi because of employees stopping to work in Noida due to layoff speculations.

Talking on why they had to shut down operations in these cities, Grofers VP tells me,

The biggest challenge in the new cities is to quickly build a network of merchants to service every area. Also, it takes ​some time for customers to come out of their traditional habits of grocery shopping and move to an online platform.

​We feel these ​s​​mall cities are not ready for hyperlocal business yet​.​ Once they are, we will reconsider our strategy. 

The startup was set up in 2013 by IIT graduates Albinder Dhindsa and Saurabh Kumar and is currently worth more than $300 Mn after the latest round in November. The round was led by Japan’s SoftBank Corp in which the company raised about $120 million. Other participants of this round included existing investors Tiger Global and Sequoia Capital.

Previous fundings include a round worth $10 million led by Tiger Global in February and another worth $35 million led by Tiger Global and Sequoia Capital in April. At the time of this investment, the company was going through more than a thousand orders a day.

The total funding raised by the company, as of now, is $160 million.

The article has updated with exclusive comments from Grofers

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