
RedMart fills Singapore’s e-groceries void
When entrepreneur Steve Melhuish moved to Asia from the UK his wife was a prodigious online shopper, having grown accustomed to ordering her groceries from Ocado or Waitrose. While he made headway in Singapore’s internet space, launching realty portal PropertyGuru in 2007, she was frustrated by a lack of options.
Singapore's main grocery retailers NTUC FairPrice and Cold Storage offered online ordering and home delivery services, but they weren't rated very highly.
"The customer service was terrible and the inventory was very restricted compared to what was offered in the stores," says Melhuish. "Then about 18 months ago my wife started using RedMart and really liked it. Around the same time a consultant also mentioned the company, and then it was like everyone was talking about it."
RedMart, which launched in late 2011, provides a selection of more than 4,000 groceries and home essentials to Singaporean households. Delivery is free for orders above S$75 ($59).
Melhuish and his business partner JaniRautiainen participated in a $1.29 million seed in 2012 and a Series A round followed in July 2013, provided by Singapore online gaming firm Garena.
Last week a $5.4 million bridge round, led by Eduardo Saverin, co-founder of Facebook. Melhuish and Rautiainen also participated, along with JFDI.Asia co-founder MengWeng Wong, Lo & Behold Group founder Wee Teng Wen and Lion Rock Capital also participating.
The company was conceived inside and outside the classrooms at Singapore-based business school INSEAD. Co-founders Roger Egan and VikramRupani 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 says 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. "They don't have it in their DNA," he adds. "We are also a logistics and technology company and their approach is all about real estate and maximizing profit per square foot."
Singapore's organized retail market is worth $5.9 billion and while Egan is unwilling to divulge RedMart's revenues, he thinks he can build a $1 billion business. The company employs 100 people, has a fleet of 16 delivery trucks and will soon move from its 36,000 square-foot warehouse for a larger facility.
The bridge financing is larger than anticipated and will be used to provide the technology and infrastructure required to support month-on-month revenue growth of 20-30%. Geographical expansion is on the agenda, but so too is movement into new verticals. "There is a lot of value in the infrastructure we have built and it can be leveraged beyond groceries," Egan says.
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.