The country’s top online grocer BigBasket has started preliminary discussions for its next fundraising exercise, targeting an investment ticket size of over $100 million, Hari Menon, chief executive of BigBasket told VCCircle over a telephonic interaction.
Though the talks for the new fundraise will start from June, the company has already initiated the documentation process, he added.
“These are quite early days to talk about our next round of funding. The next round of capital would be for growth, more specifically for enhancing our marketing and investing in analytics,†said Menon, refusing to divulge details on the potential investors.
BigBasket was reportedly in talks to raise $110-150 million from Chinese Internet giant Tencent, Chinese business conglomerate Fosun and US-based e-tailer Amazon to expand its warehousing and cold chain facilities, The Economic Times had reported on Tuesday citing four people aware of the development. The fundraise would double BigBasket’s valuation to as much as $1 billion, the report added.
Menon, however, denied the developments mentioned in the ET report. “The report is totally incorrect. We took care of the cold chain and warehousing with the $7 million debt financing round from Trifecta and the large sanction from the Ministry of Food Processing Industries,†he explained.
While an Amazon India spokesperson declined to comment on the development, queries sent to Fosun and Tencent went unanswered at the time of filing this report.
BigBasket, owned by SuperMarket Grocery Supplies Pvt. Ltd, is staring at a potential Amazon onslaught as the Seattle-based behemoth is already making headway to capture a significant market share of the Indian grocery and food retail segment. While it is already offering online delivery of groceries and daily essentials through its app Amazon Now and its online supermarket service Amazon Pantry, it has also committed to invest $515 million (Rs 3,368 crore) over the next five years into India’s food-retailing sector. The company, which is already the number two player in India’s fast-growing e-commerce market, will open brick-and-mortar outlets as well, apart from an online portal.
Though Amazon’s entry into the food retailing business could be cause for concern for BigBasket, which is a segment leader, Menon is not looking to sell his firm.
“While it is true that Amazon can get a faster foothold by investing in us, nobody stops to think whether BigBasket is keen to put itself on the block. There have been no discussions so far between Amazon and BigBasket, even at a preliminary level, to acquire BigBasket,†said Menon.
According to a recent report by India Brand Equity Foundation (IBEF), the country’s food retail market is expected to reach $915 billion (Rs 61 lakh crore) by 2020.
Last week, BigBasket raised $7million in debt financing from Trifecta Capital to set up new warehouses, strengthen its cold chain and establish facilities to reprocess fruits and vegetables.
Additionally, BigBasket was also part of 101 companies that received the government’s approval to set up cold chain projects across the country, entailing an investment of Rs 3,100 crore, according to a report by Business Standard.
The Bangalore-headquartered e-grocer has raised nearly $250 million so far and registered an over-three-fold increase in revenue to Rs 563 crore for the financial year ended 31 March 2016. It also claims to have achieved 300% growth over the last year and expects to cross the Rs 2,000-crore milestone by the end of this fiscal. BigBasket has expanded its operations to over 30 cities from six last year and it is betting big on its private-label business. With over 4 million registered users, the e-grocery platform expects to become profitable by March 2018.
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