Singapore online grocery service RedMart raises Series A from Garena

RedMart, a Singapore-based online grocery service, has raised a Series A round from Garena, a large online gaming platform. This brings the total funding since inception to USD 4.6M.

This immediately followed a third convertible round — raised at roughly the same valuation — from Steve Melhuish and Jani Rautiainen, co-founders of PropertyGuru, Cathy Yeap, former MD of Watsons Personal Care and owner of F&B chain Cedele, Orientation Capital, East Ventures, DSG Consumer Partners, DHG Communications Network, and angels investors John Kim, David Ritchie, John Tan, Talib Yousry, Dirk Wolter, and Ryan Quinn.

Prior to March, the startup had raised about USD 1.29M from investors like Golden Gate Ventures and Skype co-founder Toivo Annus, which pegs the two most recent rounds at more than USD 3M.

The latest cash infusions will be used to improve the company’s logistical infrastructure in Singapore, a market that it intends to focus on for some time. Despite its small size, RedMart co-founder and CEO Roger Egan estimates the market’s worth at USD 5.2B.

Because of the lack of e-commerce-friendly logistics in Singapore — a problem highlighted by Rocket Internet’s Zalora — RedMart has decided to build its own system. Roger told TechCrunch that its basket size of about 30 items, much larger than what an online fashion store might have, poses a challenge.

To deal with this, the company has created its own warehousing management and transportation software, and its 11 vans are fitted with Android mobile devices that optimize delivery routes and communicate with the warehouse. While RedMart has about 25 employees in its office, its warehouse headcount is double that number.

The company says it has grown 70 percent quarter on quarter in the past 12 months. On track to break even this year (it might already have), its revenue for January 2013 was around USD 250K, up from USD 15K in the same time last year — representing almost 16x growth.

According to TheNextWeb, RedMart’s revenue run rate stands at USD 5M, with 75 percent of customers ordering again after buying from the site for the first time. On average, customers order 1.5 times a month.

It plans to raise a larger round of financing near the end of 2013, which will fuel international expansion, possibly to markets like Kuala Lumpur and Hong Kong.

Read more stories about RedMart