Online grocery company BigBasket has secured Rs 52 crore ($8.02 million) funding from its four existing investors – UAE based Abraaj Basket, Bessemer Venture Partners along with International Finance Corp and Sands Capital, documents filed with Registrar of Companies (RoC) showed.
Online grocery company BigBasket has secured Rs 52 crore ($8.02 million) funding from its four existing investors – UAE based Abraaj Basket, Bessemer Venture Partners along with International Finance Corp and Sands Capital, documents filed with Registrar of Companies (RoC) showed. The funding comes on the back of BigBasket raising another Rs 38 crore in two tranches from Helion Ventures and Trifecta Venture few days ago. Supermarket grocery and Supplies Private Limited that runs the online grocery store, issued 80,000 compulsory convertible preference shares to all four above mentioned existing investors at a premium. BigBasket raising funds from the existing investors also assumes importance as its reported talks with Amazon for a merger has failed. There were also reports that it was in talks with Alibaba backed Paytm Mall for an investment.
Inventory-led firms such as BigBasket also competes with hyperlocal grocery delivery companies like Grofers which have an online marketplace model. The timing of the funding also assumes significance as Grofers too has raised funds of $14.7 million (`96 crore) from its Singapore-based parent company Grofers International last month. The fresh funding may give new lease of life in its battle with BigBasket. Last year, Grofers shut down its services in 9 cities citing low acceptance. Besides the competition from the pure-play grocery delivery companies, BigBasket also faces the competitive threat from Amazon. The global e-commerce giant is currently present in select locations across the country and plans are to expand into newer cities.
The grocery and foods market in India is estimated at $400 billion and this includes packaged food. According to consulting firm Technopak, the online grocery platforms contribute only about $300 million. However, loss and uncertain investment climate have been making the businesses of such niche e-commerce start-ups quite challenging. Some like PepperTap have already windup their businesses. BigBasket posted a loss of Rs 278 crore on revenue of Rs 580 crore in the year ended March 2016. Apart from B2C, BigBasket is also involved in B2B segment. Bigbasket clocked R100 crore annualized turnover by March 2017 from its B2B food service business with its offerings of meats, private labels, staples and gourmet products to HoReCa (Hotels, Restaurants & Caterers) segment.