Mumbai : Online grocer BigBasket has raised $300 million in a new funding round led by Chinese e-tailer giant Alibaba and others. The company plans to use the money to build farmer networks, expand deeper into existing cities and hire new hands, the company said, adding it employs 16,000 currently.BigBasket operates in 30 cities and claims a monthly run-rate of Rs 200 crore. This is expected to increase to Rs 500 crore by March 2019.
The domestic retail market is worth over $900 billion and groceries account for about $600 billion of it. “BigBasket is delighted to receive this funding from Alibaba, which will essentially be directed towards growth and consolidation by bettering our technological, analytical, and infrastructural prowess,” Hari Menon, chief executive and co-founder, said. “We are currently partnering with about 1,800 farmers and aims to become the most preferred partner for up to 3,000 of them. Our strategy is to eventually become the one-stop-shop for customers in future,” he said. Rather than focusing on expansion into more cities, BigBasket is planning to dig deeper into the cities it is present already, he said. Meanwhile, Alibaba’s affiliate Ant Small and Micro Financial Services Group (Ant) has invested about $200 million in online food ordering app Zomato.
Info Edge (a large shareholder in Zomato) said Zomato has signed a “definitive agreement to undertake a primary fund raise of an amount of approximately $150 million from Ant”. The board of Info Edge has approved a proposal for divestment of 32,629 equity shares of Zomato for about $50 million to Ant, the filing added. Ant operates the world’s largest mobile and online payment platform, Alipay that has 520 million Chinese users and over 200 financial institution partners in China. Alibaba is aggressively investing in the Indian market. In 2015, it had invested in e-commerce major Snapdeal. Previously, BigBasket has raised over $200 million from investors like Abraaj Group, Bessemer Venture Partners, Growthstory, Helion Venture Partners, IFC and Sands Capital. With people becoming comfortable buying even milk and bread online, the online grocery segment is projected to witness a strong growth over the next few years in India.
BigBasket recently crossed the eight million customers mark. It closed the previous fiscal (2016-17) with Rs 1,410 crore in revenue and has broken-even in Bengaluru and Hyderabad. BigBasket expects to break-even in Kolkata, Ahmedabad and Chennai in the next three months. Operational in 30 cities, the company is clocking Rs 200 crore in terms of a monthly run-rate. It expects that number to rise to Rs 300 crore in August.
