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December 17, 1999
Online Indian Grocer Gets Financial Backing
Arthur J Pais
EthnicGrocer.com, the first online store to target the ethnic market by providing over 20,000 products that cater to Indians, Chinese, Turkish, Polish, Korean and many other nationalities, has received $ 12 million investment from venture capital firms, Kleiner Perkins Caufield & Byers and Benchmark Capital.
The six-month-old firm which started as a classroom project at Kellog School of Business, Northwestern University was founded by Subhash Bedi, 28, and Parminder (Parry) Singh, 29.
"With a company like EthnicGrocer.com, whose growth has already exceeded the most optimistic forecasts for this quarter, we recognize the potential that they have to become a powerful brand and dominant player in the online ethnic grocery category," said Vinod Khosla, general partner, Kleiner Perkins Caufield & Byers.
"Their approach and commitment to quality and depth of products is similar to that of Amazon.com," he said.
EthnicGrocer.com is located in Evanston.
"EthnicGrocer.com has successfully demonstrated their ability to maintain a unique site that is ideal for anyone that loves food," said Bob Kagle, general partner, Benchmark Capital.
"Their ability to simultaneously develop their business model to incorporate additional sites like Namaste.com, QueRico.com and HuanYin.com is significant for the world of e-commerce."
"These sites will quickly become household names and enable consumers an opportunity to revisit their roots and celebrate their culture and traditions on a regular basis," he said.
The two venture capital firms have had tremendous success with their investment strategy, which includes the backing of such Internet success stories as Amazon.com, AOL.com, eBay.com, Excite.com, iVillage.com, Webvan.com, HomeGrocer.com and Drugstore.com.
"Kleiner Perkins Caufield & Byers and Benchmark Capital bring to the company a wealth of expertise in the e-commerce world and a commitment to make EthnicGrocer.com a true world-class company," said Parry Singh, president and CEO, EthnicGrocer.com.
"Their support will help us achieve our ultimate goal -- to make authentic ethnic food and consumer products accessible to everyone."
At the beginning, EthnicGrocer had the Indian market in mind. Bedi and Singh had heard from their friends and relatives that despite the growth in Indian shops in big cities such as New York, San Francisco, Chicago and Houston, there were thousands of people who had to drive over an hour, each way, to get quality ethnic food.
The inspiration for the site began when Singh, visiting his brother in California, found out that his sister-in-law had to drive an hour from Burbank to Artesia every week to do her Indian shopping.
Today, Namaste.com delivers a wide variety of South Asian food overnight to hundreds of clients.
"It did not take us long time to realize that there are many other ethnic communities, including Hispanics, who faced the same problem as Indians did," says Devi Mohanty, the marketing executive for the firm. "Soon, we began extending our services to other communities."
The EthnicGrocer web sites include HuanYin.com (Chinese) and QueRico.com (Latin American).
"We offer much more than food," Mohanty added. "We offer cooking utensils, music, movies, health and beauty aids, as well as religious products and traditional cultural merchandise."
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