BigBasket to become unicorn with fresh $150 mn funding: Report
SuperMarket Grocery Supplies Pvt. Ltd, which owns online grocer BigBasket, is raising up to $150 million (Rs 1,070.20 crore) in a fresh round of funding, a report in a financial daily stated.
The Economic Times, citing four people in the know, said that UK government-owned development financial institution CDC Group Plc and South Korea-based private equity firm Mirae Asset are the potential investors.
The deal, which is expected to close in a month, will value BigBasket above $1 billion, making it the next potential unicorn, the report added.
BigBasket co-founder and chief executive Hari Menon declined to comment on the development.
The e-grocer is already on the brink of becoming the next unicorn. In February 2018, it raised $300 million from Alibaba which valued the firm at $950 million.
BigBasket, which is currently the country’s top grocery e-tailer, operates in 30 cities clocking Rs 200 crore in terms of monthly run-rate. At the time of the last funding announcement, Menon had said that he wanted to bring this number to Rs 500 crore by March 2019, which would mean that the company would finish the current financial year with a Rs 6,000-crore exit run rate.
While SuperMarket Grocery Supplies is the wholesale products supplier, Innovative Retail Concepts runs the consumer-facing arm of the BigBasket property under licence from SuperMarket Grocery.
Direct sourcing from farmers is a part of BigBasket's business model. The company had earlier said it aimed to work directly with 3,000 farmers. It also has over eight million customers.
The company recently strengthened its business-to-business arm by expanding to the HoReCa (Hotels, Restaurants, and Caterers) segment and partnering with kirana stores in an effort to transform them into technology-enabled modern retail stores.
As part of its efforts to strengthen its micro-delivery operations, it acquired subscription-based e-grocery startup RainCan last October.
Meanwhile, competition in the online grocery space has also heated up in recent times with the entry of Walmart-owned Flipkart and Amazon.
Amazon, which also owns a food processing and retail unit, has now resumed its grocery service after the online retail giant faced disruption from revised e-commerce norms which kicked in on February 1. The recent rules barred companies from selling products through vendors in which they had an equity interest. This forced Amazon to remove hundreds of thousands of products from its site over the last two weeks. However, recent media reports suggest that its business as usual for the e-commerce behemoth.
In a recent interaction with business daily Mint, Flipkart CEO Kalyan Krishnamurthy stated that the company planned to invest heavily in groceries over the next three years and was exploring to invest in or partner with offline grocery retailers.
Grofers, which earlier operated an on-demand hyperlocal delivery service, has long changed its business to an inventory and warehousing-led model. In a recent company statement, it claimed to have grossed Rs 310 crore in monthly sales for January 2019. The company, which claims to have brought 2.5 lakh new customers to its platform in January alone, is eyeing a revenue target of Rs 2,500 crore for 2018-19, it said.