The Charge Of The White Brigade

Delivering milk and groceries is a low margin, cash-burning business. Yet a bunch of startups in this space have figured out ways to thrive.

- Debojyoti Ghosh

Anant Goel had to make more than just a 20-second “elevator pitch” to sell his milk-delivery startup idea. The co-founder and CEO of Milkbasket had to wait for a year and a half before he sealed a deal with Arpit Agarwal, a principal at early-stage investor Blume Ventures. Agarwal is a bit hazy on which pitch event he met Goel at in Gurugram in November 2015. What he recalls is asking Goel how Milkbasket was going to make its subscription model work given the high cost of delivery.

He also recalls Goel’s emphatic answer. “I agree this is a big problem and here is our solution. We only do early morning deliveries,” Goel had said. Customers book milk and other daily essentials a day before. Orders are dispatched at 4 a.m. the next day and are delivered before 7 a.m.—the only delivery slot. Goel reasoned less travel time and making deliveries early in the morning would cut costs. “The last-mile delivery cost per order is almost as low as 5. You can make money on every order,” Goel, 40, had said.

Agarwal was impressed, but he decided to see how things would pan out. And finally after 18 months, Blume Ventures along with China’s Lenovo Capital and Incubator Group, the venture capital arm of electronics company Lenovo, invested $1.5 million in Gurugram-based Milkbasket in a pre-Series A round in May 2017.

“There have been four rounds after that and we participated in every round. We feel strongly about this company,” says Agarwal. Milkbasket has raised $26 million so far in equity funding and $2.2 million in debt.