Online grocery delivery firm Fraazo is in advanced talks to raise $125-130 million in a fresh round of funding from new and existing investors within just a few months of its previous fund raise, riding on the euphoria in the quick commerce space, according to the sources privy to the development.
The company last raised $50 million from WestBridge Capital, Sixth Sense Ventures, Equanimity Investments and Apar Group, among others in October. Overall it has raised $65 million so far.
Moneycontrol could not immediately ascertain the names of the new investors.
Founded in 2019 by Atul Kumar, Vikas Dosala, Sumit Rai and Aashish Krishnatre, Fraazo focuses on fruits and vegetables unlike the immediate competitors who are mostly catering to a consumer's daily essentials needs.
As compared to daily essentials or fast moving essential goods (FMCG) which have a 7-10% margin, the margins on fruits and vegetables can be pretty high, to the tune of 25-60%.
The company is also keeping a safe hands distance from the 10-minute race. As per its website, the time promised to deliver items is 90 minutes.
The focus is more on value than convenience, said one of the persons quoted above.
It claims to provide farm-fresh vegetables and fruits to customers by procuring them from farmers bypassing the traditional chain within 12 hours.
To ensure quality, the focus is on a one touch delivery delivery model where the items are touched only once after being procured from the farmers and stored in the warehouse before it is packed for delivery. This is done with an aim to preserve freshness of the produce of which a huge chunk is perishable.
The company is aggressively looking to ramp up the numbers of employees and dark stores. It currently has around 250 stores across five cities and is launching one dark store every eight hours.
The investment is happening at a time when young rival Zepto is in advanced talks to raise a $100-million round close on the heels of a $60 million fund raise. Blinkit is also in talks to raise a $500-million round from existing investor Zomato.
Swiggy which runs instant grocery delivery firm Instamart also recently said it would invest $700 million in this segment as it had plans to double down on a category that had grown at a scorching pace since its launch in the middle of the pandemic in 2020.
Even as all these companies are promising delivery of essentials in under an hour, they are divided on appropriate timing. While Blinkit says it will deliver in 10 minutes, Zepto claims its medium delivery time is 8.47 minutes. Swiggy has chosen a 15-minute spot, while Dunzo said the ‘under 19 minutes’ promise was good for customers.
Fraazo did not comment for this story.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
