Daily grocery delivery platform Milkbasket has advanced its plan to launch an initial public offering by the second half of next year, buoyed by strong growth in business in recent months amid the pandemic, a top company executive said.
Speaking to PTI, Anant Goel, Co-founder and CEO, Milkbasket said the rapid adoption of at-home grocery delivery amongst consumers during the pandemic has provided an impetus to target an initial public offering (IPO) in just a year.
“Milkbasket has a near-perfect record of reaching growth targets since being founded in 2015. The rapid adoption of at-home grocery delivery amongst consumers due to the pandemic has provided us with an impetus to target IPO in just a year, which we had initially planned for the year 2023,” he was quoted by PTI as saying.
Milkbasket, which already offers delivery of over 9,000 products across fast-moving consumer goods (FMCG), dairy, fruits and vegetables categories in five cities (Delhi, Noida, Gurugram, Ghaziabad and Bengaluru), currently has an average revenue run rate (ARR) of about US$ 100 million.
“We are now working on the process for an IPO… The process takes time and we are still in early stages, but we are looking at possibly next year… second half. For now, the thought process is to list in India, we are an Indian company and well recognised in India,” he told PTI.
Goel also denied reports of being in talks for selling out the business to Paytm Mall and Reliance Industries.
“These are reports that I also keep reading. We are not looking at getting acquired. Like any other start-up, we are open to investments, but we aren’t selling off the business.
“We are seeing strong growth and are scaling it up further. We are EBIDTA-positive already, so whether we receive the funding or not, the IPO plan is on,” he told PTI.
Goel said the company has seen significant growth in its business over the last few months. “We are approximately Rs 700 crore turnover company and we are growing, we should be Rs 1,000 crore in the next couple of quarters,” he further told PTI.
Milkbasket has raised a total of US$ 33 million in equity funding from Inflection Point Ventures, Mayfield India, Beenext, Kalaari Capital, Unilever Ventures, Blume Ventures, Lenovo Capital (LCIG), few family offices, and venture debt funding by Innoven Capital.
Interestingly, Softbank-backed Grofers had also spoken of advancing its plan to launch an initial public offer by the end of next year after its profitability path zoomed during the lockdown period.
Albinder Dhindsa, Co-founder and CEO, Grofers had said the company started making operational profit in January, and expects to become cash positive by the end of this year.
The online grocery delivery segment has gained significant traction amid COVID-19 pandemic. Offline retailers, who have taken a major hit on account of the lockdown, are also keen on partnering with digital platforms to facilitate the delivery of goods.
According to a recent report by Goldman Sachs, India’s e-commerce business is expected to grow at a compound annual growth rate (CAGR) of 27 percent to reach US$ 99 billion by 2024, with grocery and fashion/apparel likely to be the key drivers of incremental growth.
While, players like Milkbasket, Grofers and BigBasket already compete against giants like Amazon and Flipkart in the segment, the recent entry of Mukesh Ambani’s JioMart is set to shake up the segment.
“There has always been competition and that is good. Customers have choice and they can decide whether it is the cheapest item, the best quality, a wide assortment of products or guaranteed delivery (that they want). Entry of JioMart will further expand the market and offer more choice for customers,” he told PTI.
Goel added that the company caters to a niche segment of customers for all their household needs including everyday essentials like milk. “The delivery is made every day, customers can place the order till midnight and get it in the morning before 7 AM, and hence never wait for the deliveries. This is a niche yet a huge segment and we definitely lead this,” he said.