NEW DELHI: Even as a nation-wide lockdown grips India during the Covid-19 crisis, a few startups in the e-grocery space are turning cash positive due to high demand.
Gurugram (India)-based online grocery retailer Satvacart this week announced achieving the much-coveted cash positive state.
The company achieved this feat in March 2020 and followed it up with a sustained performance in April 2020, despite the Covid-19 lockdown.
Satvacart follows a micro-cluster based model whereby it maintains a completely
independent, highly tech enabled warehouse in the center of a 5 km cluster.
The company has focused its operations only in Delhi’s satellite town of Gurugram for the past 6 years.
It has a 30 min long delivery slot every 30 minutes. The 30 minute long slot ensures that customers do not have to wait to receive their deliveries for a very long time.
A delivery slot every 30 minutes ensures that the customer gets its delivery within 60 minutes of the order getting placed.
The company was setup in the year 2014 by Rahul Hari – a former strategy consultant with
EY and Cleartrip, and Deepika Saxena – a former product design and development engineer with Oracle. The company was the first to launch milk subscriptions in Gurgaon.
The company pivoted from milk subscriptions to an inventory led instant delivery model in search of the right metrics moving towards profitability.
Commenting on the achievement, Rahul Hari, Founder, Satvacart said, “We have always
believed in getting metrics right for a single unit of the business, however small the scale may be. Achieving an EBITDA positive proves our hypothesis and ensures the business is in a state where the more money we invest, the more return it generates.”
The company’s co-founder Deepika said, “We have been working with a hypothesis to create an order processing black box that is completely independent of people skills and can operate wherever we put it – be it Gurgaon, Delhi, Mumbai, London or New York. The current achievement confirms creation of this unit. It can be replicated anywhere across the world, similar to the Pizza delivery multinationals”
Sameer Bagul, a member on the Board of Satvacart said, “Current environment post Covid19 has increased the demand for online groceries, which is natural as people are staying home. However, this will be new normal as people have realized the benefits of ordering online and will be more comfortable henceforth.Achieving profitability will allow the company to expand into new clusters and geographies faster.”
The startup is inspired by the business model of Fresh Direct in the US. Fresh Direct– started its operations in the Queen’s area of Manhattan and restricted its operations to that area for a very long time, optimizing its business model. The company had raised only $31M over the initial 10 years, and is profitable since 2010 (using only the $31M raised in Oct 2003). FreshDirect today is one of the largest online grocers in US.
Satvacart is an online grocer that delivers over 5,000 products across fruits, veggies, personal care and home care products.