Singapore online grocery retailer RedMart raises $23m

While SoftBank and Visionnaire are new investors, Garena and Saverin also featured in earlier rounds.

RedMart has now raised $27 million from VC investors. Steve Melhuish and Jani Rautianen, founders of Singapore real estate portal Propertyguru, participated in a $1.29 million seed round in 2012. A Series A round followed in July 2013, led by Garena, and then in January Saverin led a $5.4 million bridge round.

Other investors in the business include Pivotal Asia, East Ventures, Lion Rock Capital and Golden Gate Venture, as well as Skype co-founder Toivo Annus, and Meng Weng Wong, co-founder of incubator JFDI.

RedMart will use the new capital to build operational capacity and expand its product range to include fresh food, according to a statement. The company aims to provide affordable groceries and household essentials through its online store while offering a seven-days-a-week home delivery service.

"Online grocery retail is a huge, untapped opportunity in SouthEast Asia and we believe RedMart is uniquely positioned to capitalize on the inevitable movement towards purchasing groceries online," said Keith Nilsson, managing partner of San Francisco-based Visionnaire.

RedMart was conceived inside and outside the classrooms at Singapore-based business school INSEAD. Co-founders Roger Egan and Vikram Rupani discovered there was no local equivalent for US online grocery store FreshDirect and chose courses that would help them put together a business model. By the time they graduated in late 2010, a supply agreement with Unilever was already in place.

Egan previously told AVCJ that bricks and mortar grocery retailers don't have the incentive to invest in online services because they have already sunk capital into physical stores and don't want to cannibalize this business. In this context, he describes Redmart as a logistics and technology company rather than a real estate play like many other retailers.

It is one of few Singapore-headquartered start-ups that have been in business for four years and are now valued at $100 million or more. RedMart is trying to carve out a meaningful online chunk of an offline organized retail market worth $6 billion, and is already seeing average month-to-month revenue growth of 20-30% the service launched, Egan told AVCJ in earler this month

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