Alibaba has joined Paytm for discussions to pick up a USD 200 Mn stake in online grocery startup Bigbasket. Some sources reported that earlier this month, Paytm was in talks with online grocery startup Bigbasket to invest USD 200 Mn for a substantial stake, for which Paytm had also started due diligence of Bigbasket accounts and operations. The proposed USD 200 Mn investment is offered at a valuation of nearly USD 900 Mn, post the investment. It is also being said that Bigbasket was also in talks with Singapore’s sovereign wealth fund Temasek Holdings and China’s Fosun Group as well.
Currently it is unclear if Temasek will join the ongoing funding round with Alibaba and Paytm, or if it will be a direct investment at a later stage. For, Fosun’s venture capital arm Kinzon Capital, it is in discussions with Bigbasket for a USD20 Mn-USD30 Mn co-investment with Alibaba and Paytm in the ongoing funding round.
Paytm founder Vijay Shekhar Sharma told ET that the company was gearing up to invest in an e-grocer in alignment with the company’s online-to-offline strategy. Alibaba, along with its payments affiliate Alipay, owns more than a 50% stake in Paytm Mall. It has been doubling down on grocery and physical retail investments globally.
Bigbasket claims to be the biggest online grocery player in the country.with over 50,000 orders each day. Per an official statement, the average monthly customer spend has grown from INR 500–INR 800 in December 2011 to INR 2,000+ in May 2017. According to a company statement, the online grocery store stocks over 20,000 products and 1,000 brands including fresh fruits and vegetables, packaged bread, bakery and dairy products, etc.
The company claimed to have crossed the 5 Mn customers’ mark in May 2017.
Founded by VS Sudhakar, Hari Menon, VS Ramesh, Vipul Parekh, and Abhinay Choudhari in 2011, the company has to date raised about USD 305.8 Mn spread across six rounds. In March 2017, Bigbasket raised about USD 6.9 Mn venture debt from Trifecta Capital. The company’s online grocery stores are present in more than 26 cities across India including Bengaluru, Hyderabad, Mumbai, Pune, Chennai, Delhi, etc.
The Indian online grocery market is estimated to reach USD 40 Mn by FY ’19 growing at a CAGR of 62% from 2016 to 2022. Other startups in the grocery segment, apart from Bigbasket and Amazon India include ZopNow, Satvacart, Godrej Nature’s Basket, DailyNinja, etc.