Milkbasket funding: Three things that make the company different

Gurgaon-based grocery start-up Milkbasket announced it raised $7 million in Series A, led by Kalaari Capital. BeeNext, Unilever Ventures, and Blume Ventures participated in the round as well.

The funding indicates that investor appetite for online grocery start-ups is alive and kicking, despite the possible market polarization between larger players - Big Basket and Grofers amongst the home-bred; Amazon and now, Walmart-Flipkart among the multinationals.

Where does Milkbasket fit in? The company does have a differentiated operating model that makes it less cash guzzling. The segment, of course, is large and growing at nearly a billion dollars in 2017.

Here are three things to know about Milkbasket:

1. Milkbasket started in 2015 and currently delivers 8000 orders a day, only in Gurgaon. Milk of course, but also vegetables and fruits, personal care products, spices, cleaning supplies etc. The company currently operates two hubs.
 
2. There is no two-hour delivery. The company has a restricted delivery model - it only supplies only between 5am and 7 am. Just like newspaper delivery, the customer isn't disturbed. The ordered stuff is dropped-off at the door.

3. The operating model allows two things. From a customer perspective, it is less intrusive. It also allows Milkbasket to cut down costs dramatically. Because 5-7am is not a rush hour, the company's delivery vehicles don't waste time being held up in traffic. Two, in the attended model, where the delivery executive rings a bell to deliver, up to 15 minutes can be lost by the time he is back on the road for another delivery. Milkbasket says its current cost of delivery, per order, is only Rs 5. The last mile logistics cost for other players can run as high as Rs 50 or more every order.