Company: Local Banya

Category: E-commerce portal to order groceries, food and beverages.

Founded on: May 1, 2012
Closed on: January 8, 2016
Founders: Amit Naik, Karan Mehrotra, Rashi Choudhary

Company Journey: Local Banya was founded in Mumbai initially to provide groceries at
the home by ordering online. They provided a vast variety of products including exotic fruits
and vegetables, kitchen ware, household items and personal care products. They had also tied
with some niche stores like shor sharaba to provide exclusive products to the people. Initially
starting from Mumbai, they expanded to Navi Mumbai, Delhi NCR, Pune, Hyderabad and
Ghaziabad also.
They focused on keeping their operational costs as low as possible so that can provide
maximum margin to the retailers and suppliers. For the same, they did not stock majority of
their products and preferred getting it delivered through the retailers only. They also kept the
number of delivery staff and the required vehicles at a minimum, which were mostly
outsourced.
Coming to the funding, they took off with 70 Lakhs of seed funding from their own savings
and eventually got their Series A and B funding. They also got their Venture funding from
Karmvir Avant Group in 2014. Local Banya managed to raise approx. $20 Million from the
beginning.
According to the website, Local Banya has more than 100 employees and carries more than
400 deliveries per day.

Eventually, there were issues in their operations and they ran out of their funding money.
Situations worsened further till the extent that they were unable to pay to their employees for
2 months. It was speculated that the Vice President had resigned due to the instability of the
firm. Soon after that, the website was shut down but no claims or statements were made by
any of the founders regarding the next set of actions. The only news which came was that
Local Banya is upgrading its website to provide better services to its customers and they’re
making some structural changes in their company and would soon start with taking orders
and making deliveries.
No further clarifications were made but experts think that the company shut down due to lack
of funds. Since grocery business works on low margins and constant cash flow is required to
fulfil the requirements, Local Banya was unable to do so and thus had to shut down.

Where are the Founders?

All 3 co-founders resorted to looking for jobs as soon as the start-up was shut.
Amit Naik is currently the Director of Product at Flipkart since the last 5 months and was the
product head at Future Group for 3 years.
Karan Mehrotra is the Associate Vice President at Lumina Datamatics Ltd. since 2017.
Rashi Choudhary has been working with RP Tech India since 2015 as the Head of Online
Strategy and Services.
References

https://economictimes.indiatimes.com/small-biz/startups/localbanya-is-temporarily-out-of-
business/articleshow/49280286.cms?from=mdr
https://www.crunchbase.com/organization/localbanya#section-lists-featuring-this-company
https://officechai.com/news/local-banya-faces-cash-crunch-employees-have-not-been-paid-
for-2-months/
https://yourstory.com/2014/01/localbanya-funding-karmvir-avant-group
https://inc42.com/flash-feed/localbanya-employees-customers-feel-cheated/
https://www.firstpost.com/tech/news-analysis/why-e-grocer-local-banya-got-it-right-while-
others-failed-3615533.html
https://yourstory.com/2015/03/localbanya-raises-funding-shrem-strategies