Flipkart Bets On Ninjacart To Take On Amazon, JioMart In Grocery Biz

E-commerce firm Flipkart India and Walmart,the world’s biggest retailer on Monday announced a fresh round of joint strategic investment of $145 million in supply chain tech firm Ninjacart, which is focusing on India’s fresh produce market to organise the agriculture ecosystem. The investment has almost doubled the valuation of Bengaluru-based Ninjacart from $500 million witnessed last year to about $900 million and the firm is nearing becoming a unicorn, or a startup with over $1 billion valuation, according to the sources.

The companies said the investment of $145 million from Flipkart and Walmart further validates and strengthens Ninjacart’s vision to ensure better access to high-quality fresh produce for more retailers and consumers across India. They said this would also help create economic opportunities and better incomes for farmers in India.

The investment is expected to help Flipkart take on rivals such as Amazon, Reliance’s JioMart and Tata-backed BigBasket to tap the grocery market which is expected to be worth $850 billion by 2025, according to the analysts.

“Flipkart offers grocery in 1800 cities and towns and aims to take its offering to 2,000 more towns by mid-next year,” said Kalyan Krishnamurthy, CEO, Flipkart Group about the investment in Ninjacart. “Fresh fruits and vegetables will be an integral part of the expansion, with the company investing in technology capabilities to ensure the highest and most stringent quality checks for the end consumer.”

Last year in October, Walmart, and the Flipkart Group, made a fresh round of investment in Ninjacart at a valuation of about $500 million, according to the sources. This followed the investment made by Walmart and the Flipkart Group in 2019 at a valuation of about $300 million.

Flipkart is also working to bring efficiencies in the community e-grocery shopping model. “The company has intensified its focus on partnering with Farmer Producer Organisations (FPOs) to provide access to high-quality fresh produce, staples, pulses, and spices, bringing new revenue opportunities to farmer communities across the country,” said Krishnamurthy.

The companies said the investment will further accelerate Ninjacart’s journey towards building technology and infrastructure to organize, empower and enhance the lives of millions of agri value chain participants. These include farmers, resellers, retailers, consumers, and supply chain participants. Ninjacart has been investing significantly in tech platforms and supply chain infrastructure over the past two years.

“The funds will enable us to dream beyond organising the farmer-to-retailer ecosystem to a much larger goal of organizing the complete agri ecosystem and enabling transparent commerce,” said Thirukumaran Nagarajan, co-founder, and CEO, Ninjacart. “We are ecstatic that Flipkart and Walmart continue to partner with us in making this vision a reality by believing in our technological expertise and core values.”

Nagarajan, an alumnus of the College of Engineering Guindy, Chennai and IIM-Kozhikode, had seen a gap in the food distribution market and realised that there was an opportunity to add value to the market through technology. So in 2015, he founded Ninjacart as an on-demand grocery delivery firm along with Vasudevan Chinnathambi, Kartheeswaran KK, Ashutosh Vikram, and Sharath Loganathan. Subsequently, he realised the extent of inefficiency in the supply chain for perishable produce and pivoted the company to become an end-to-end, B2B fresh produce platform.

Ninjacart uses sophisticated supply chain algorithms it developed in-house. The firm leverages big data, predictive analytics, mobile applications and the Internet of Things to power a just-in-time supply chain that connects farmers to retailers via its network. Ninjacart now works closely with the farmers and has till date helped over 1,00,000 farmers across 150 villages to generate better revenues. Its supply chain technology has helped solve problems such as distribution inefficiency and price risk. Ninjacart said its endeavour is to reach every single farmer across the country with our technology solutions and help them better their lives.

Nagarajan of Ninjacart said India is at the cusp of formalising the agriculture industry, with the advent of better road connectivity, GST (goods and services tax), seamless payments, digital infrastructure. “This opens up a tremendous opportunity to organize our agri ecosystem landscape like never before. We are investing in this huge potential to create value,” said Nagarajan. “The funds will be deployed to build world-class teams, scalable tech platforms to organize and grow the network.”

Earlier this year, Ninjacart inked a memorandum of understanding with the Union Ministry of Agriculture & Farmer Welfare to strengthen the market linkages and promote best practices in the farming sector. The role of Ninjacart is to create and host the Agri Marketplace Platform (AMP), which will allow farmers to earn a fair price for their output, offer consumers better food and value to all the players to create value.

As Flipkart and Ninjacart strengthen their partnership to support the local farming communities, the companies said digitisation can help to ensure the quality of food from the nascent stage and throughout the agricultural life cycle. Additionally, they said Walmart and Flipkart have a history of working to support farmer’s livelihoods. In addition to these investments, the Walmart Foundation in 2018 committed $25 million over 5 years and have already allocated $15 million in grants to support farmers market access programmes.