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Exclusive: Sixth Sense Ventures backs hyperlocal logistics startup GrabNovember 12, 2015
Consumer centric venture fund Sixth Sense Ventures, floated by former IDFC Securities’ managing director and its co-head of research Nikhil Vora, has invested in Grab, a Mumbaibased
hyperlocal logistics service provider, adding it as the fourth portfolio firm for its maiden fund.
The company, which is run by Grab a Grub Services Pvt Ltd,had recently raised funding from restaurant listing and online food ordering startup Zomato.
Vora told VCCircle that his VC firm co-invested in Grab as part of the same round.
“Sixth Sense Ventures has invested nearly Rs 7 crore ($1.5 million) in Grab as part of the deal,” he said.
“Hyperlocal sector is becoming critical for growth. Now the hyperlocal deliveries are mainly focused on food stuff. Over a period of time, it could migrate to a lot of other services such
as groceries and health care,” he told VCCircle.
“And with Zomato on board as co-investor, the client’s new customer acquisition cost fundamentally becomes zero as it will introduce them in all geographies in the country,”
“While Zomato’s association with Grab has started off as a financial investment, over time the relationship between the two will be a strategic one,” he said.
Interestingly, Zomato had also invested in another hyperlocal delivery startup called Pickingo.
Grab was launched in 2012 by Pratish Sanghvi, Jignesh Patel and Nishant Vora.
An alumnus of Drexel University, Sanghvi served as a consultant in Blackrock for nearly seven years. While Patel, an alumni of Vishwakarma Institute of Technology, was earlier associated with Century Electronics & Electrical Equipment as managing partner for around nine years, Vora is an engineering graduate from Mohawk College and is also a promoter at Silver Foliage.
Grab claims to have over 500 riders (delivery boys) in Mumbai and connects users to more than 350 restaurants. It claims to have delivered orders worth Rs 35 crore in Mumbai for the year ended March 31, 2015. In April, Grab raised $1 million (Rs 6.3 crore then) from Oliphans Capital and former Network18 CEO Haresh Chawla.
It counts country’s top QSR chains Pizza Hut, Burger King and Subway and fine dining restaurant chains Mainland China, Oh! Calcutta and Punjab Grill as its clients.
Sixth Sense Ventures
Meanwhile, Vora expects to complete fundraising for Sixth Sense Ventures’ debut fund soon. The fund that was launched around two years ago had originally targeted to make the final close at Rs 250 crore ($40 million then) by mid-2014.
However, this got delayed as the firm had to incorporate certain changes in its private placement memorandum and refile with securities market regulator SEBI. Domestic funds need to register under SEBI’s AIF norms.
Vora said the VC firm is presently raising money only from domestic investors including family offices, HNIs and institutions.
“One of India’s lead institutions has committed to invest up to Rs 40 crore in our fund. Technically, the fund will announce closure by March 17 (2016) but we may choose to do it
earlier. Some of the most marquee names of corporate India are participants in the fund and remain closely associated with Sixth Sense,” Vora shared.
Sixth Sense Ventures has previously invested in three companies. In December 2014, it made its debut investment in luxury watches retailer Ethos Ltd. In January this year, it put money in Cross Roads India Assistance Pvt Ltd, a road side assistance provider for cars and two wheelers. In August, it joined several others to co-invest in media group NDTV ‘s ecommerce venture Gadgets 360 degree.
It is also close to investing in another unnamed firm.
Vora is independently also a private investor in several firms including One97 Communications, the firm behind mobile wallet and e-commerce firm Paytm; Kangaroo Kids Education Ltd (KKEL), which runs Kangaroo Kids Preschool and Billabong High International School; Vini Cosmetics, an FMCG company which raised funding from Sequoia Capital; sports-focused digital display solutions firm Technology Frontiers, backed by Avigo Capital and MRO AirWorks, backed by NEA and GTI Capital.