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Online grocery firm Localbanya halts operations

  • Online grocery start-up
    Localbanya has temporarily halted operations, citing the upgradation of its
    back-end, the
    Economic Times
    reported.
  •  
    • Online grocery start-up
      Localbanya has temporarily halted operations, citing the upgradation of its
      back-end, the
      Economic Times
      reported.
    •  

    •  
    • “We are
      temporarily suspending services due to maintenance and upgrade purposes,”
      the company said on its website. “No orders will be processed at this
      time.”
    •  
    • The company, however,
      rejected speculation that it was strapped for cash, and maintained that staff
      attrition was not unique to it.
    •  
    • “Our current
      team is well structured and the organisation continues to attract talent by
      virtue of the strong brand that we have built,” said founder Karan
      Mehrotra.
    •  
    • Two suppliers of
      Localbanya said they had been told that there was a shortage of funds.
      “The company is also trying to change the model of sourcing merchandise
      from large retailers or cash-and-carry players to consumer goods companies
      directly,” said another supplier.
    •  
    • Founders Mehrotra, Rashi
      Choudhary and Amit Naik have been looking to raise $15-20 million for the past
      few months, and another another $35-40 million by the end of this fiscal.
    •  
    • “Fundraising is
      a regular activity in the category and we are receiving support from our
      existing investors, while continuing discussions at an advanced stage with
      potential investors, both domestic and Asian,” said Mehrotra.
    •  
    • Localbanya started
      operations three years ago and is present in Mumbai and Navi Mumbai, Pune,
      Hyderabad, the National Capital Region and Ghaziabad. It competes with Big
      Basket, PepperTap, ZopNow and Grofers. All these firms, too, have been
      aggressively raising funds.
    •  
    • As per estimates,
      online sales in grocery and FMCG would reach 5 per cent of total sales by 2020,
      with even brick-and-mortar chains like Reliance Retail and Spencer’s Retail
      planning to foray into this space. Analysts say the segment will see
      consolidation in the days to come. 

     

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