Abraaj leads $150-mn BigBasket funding

By: | Updated: March 23, 2016 1:09 AM

Online grocery delivery firm BigBasket has raised $150 million (approximately Rs 1,000 crore) in the latest round of funding led by a new investor, the Dubai-based private equity player Abraaj Group.

In August last year, BigBasket had raised  million led by Bessemer Venture Partners although losses in FY15 trebled to Rs 60 crore from Rs 21.6 crore in FY14, according to the documents filed with the registrar of companies. In August last year, BigBasket had raised million led by Bessemer Venture Partners although losses in FY15 trebled to Rs 60 crore from Rs 21.6 crore in FY14, according to the documents filed with the registrar of companies.

Online grocery delivery firm BigBasket has raised $150 million (approximately Rs 1,000 crore) in the latest round of funding led by a new investor, the Dubai-based private equity player Abraaj Group.

Other investors include International Finance Corporation and Sands Capital, and existing investors such as Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital, a statement from Abraaj Group said.

In August last year, BigBasket had raised $50 million led by Bessemer Venture Partners although losses in FY15 trebled to Rs 60 crore from Rs 21.6 crore in FY14, according to the documents filed with the registrar of companies.

Revenues, however, rose to Rs 170 crore from Rs 70 crore in FY14.

BigBasket will use the money to penetrate existing markets and expand in Tier II cities. It also plans to scale up the recently launched express delivery and speciality store business that caters to top-up and emergency purchases.

The Indian grocery market is estimated at Rs 20 lakh crore ($308 billion) and the size of opportunity for the organised (including online) retailers is around Rs 3.4 lakh crore, according to Kotak Institutional Equities. Amazon has entered the grocery space with its service Amazon Now and will will sell products across multiple categories. BigBasket, founded in 2011, currently operates in eight metro cities and 10 Tier II cities. The company sells over 19,000 products executing over 1 million orders per month.

BigBasket, the company says, continues to deliver strong growth, with a fivefold increase in monthly revenues over the last 18 months, supported by a higher proportion of high-margin private label products. Own-brand products currently account for 33% of revenues and are projected to reach 40% by the end of this year.

VS Sudhakar, co-founder of BigBasket, said the grocer intended to increase the reach of the one-hour express delivery service and also launch a marketplace for speciality stores in the coming months. “This, coupled with an expansion in our range of private label products, will create a solid foundation for growth in both revenue and profitability,” Sudhakar said.

Omar Lodhi, partner and head of Asia for the Abraaj Group, said, “We are excited about the investment opportunities in India, a key geography for us, where we continue to identify and partner with market leading companies. Abraaj will leverage its strong experience in the consumer sector to enable BigBasket to further enhance its strong domestic position.”

Hyper-local delivery companies such as Grofers and Pepper have either closed down their operations in Tier II cities or put their expansion plans on hold.

The Abraaj Group has been present in Asia for over a decade and deployed $1.4 billion in the region to date in a range of sectors including healthcare, financial services, logistics, consumer goods, and food and beverages.

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