The country’s largest online grocer BigBasket.com, which recently raised $50 million from its existing investor Bessemer Ventures, is eyeing a $1-billion valuation over the next 24 months. The online grocery business is expected to touch $20 billion in India by 2020 and BigBakset aims to remain the market leader. In an interview with Prabhu Mallikarjunan, CEO and co-founder Hari Menon spoke on the challenges in the industry and the company’s expansion plans. Excerpts:
What are the expansion plans of the company?
We currently have presence in six cities — Bengaluru, Hyderabad, Mumbai, Pune, Chennai and NCR. By October, we will enter Ahmedabad and Kolkata. We would also venture into 35 tier II cities. We will scale our one-hour express delivery option, which kicked off this month in Gurgaon, to other prime cities by the year end.
What is the biggest challenge BigBasket is facing?
Our biggest challenge is in retaining the blue-collar workforce. Around 70% of our employees are in this segment, including people picking up stock, packaging and delivering goods. The attrition rate is as high as 10-15% month-on month.
What are your plans for further acquisitions?
No, we do not intend to buy any of the small players in the market. We would like to remain the market leader in this segment, and we welcome competition as it would help open up markets faster. Our recent acquisition of Delyver, a Bengaluru-based hyperlocal delivery startup, will help us deliver goods faster.
What are your fund-raising plans for further expansion?
We have raised $111 million so far and these funds will be primarily used on our expansion. We plan to raise $150 million over the next two years and we have appointed Citibank to help raise this fund. This money will mainly be used for marketing our brand.
When do you expect to break-even?
We expect to break-even by end of 2017. We are able to make profits much faster in smaller towns as the investment is lesser compared to bigger cities. For instance, a place like Mysore has seen great traction.