BigBasket, Grofers revive merger talks: Report
Online grocer BigBasket could acquire smaller rival Grofers as part a transaction where investors of the two companies would commit more capital to the combined entity, a media report said.
The Mint newspaper said, citing three people in the know, that the two online grocers have revived talks for a merger as their investors look to join forces against Amazon and Flipkart.
BigBasket is backed by China’s Alibaba Group Holding Ltd while Grofers counts Japan’s SoftBank Group Corp as an investor. SoftBank is also an investor in Alibaba.
The report said that, if the deal goes through, Alibaba could invest $250 million in the combined entity while SoftBank could also put some capital.
As of now, discussions with BigBasket are at a nascent stage, and Grofers might look out for other investors. Grofers has already signed a non-binding agreement with a strategic investor, which is conducting due diligence, the report said.
BigBasket and Alibaba didn’t respond to queries from TechCircle. SoftBank declined to comment.
Grofers co-founder Albinder Dhindsa didn’t comment on the reported merger talks but said: “Our business continues to exceed our expectations, and we are pleased by our growth year-on-year.”
In 2017, reports cited a potential buyout of Gurugram-based Grofers by Bengaluru-headquartered BigBasket as the former was struggling to raise funds. However, in March, Grofers managed to raise Rs 400 crore ($62 million) in a Series E round led by existing investor SoftBank, a Japanese internet conglomerate.
Grofers was founded by Saurabh Kumar and Albinder Dhindsa in 2013.
Six months later, in June 2016, Grofers laid off some employees and cancelled campus job offers as part of operational restructuring.
On the other hand, bigger rival BigBasket is barely $50 million away from becoming a unicorn after Chinese e-commerce giant Alibaba led a $300 million funding round in February 2018.