Tata Group to buy majority stake in BigBasket for about $1 billion: Report

 BENGALURU (Reuters) - Indian online grocery startup BigBasket is in advanced talks to sell a majority stake for about $1 billion to salt-to-software conglomerate Tata Group , the Economic Times reported on Wednesday, citing three sources familiar with the matter.

The century-old group has been planning to launch a "super app", one that will tie in all its consumer businesses, several media reports have said, as it competes against Amazon and Reliance Industries , who have made big bets on India's booming e-commerce market.

Bengaluru-based BigBasket competes with Walmart Inc-owned Flipkart and Amazon's "Fresh" service as more consumers stay indoors and choose to shop online during the COVID-19 outbreak.

The Tata Group and BigBasket did not immediately respond to a Reuters request for comment.

China's Alibaba <9988.HK>, which holds around 26% stake in BigBasket, is expected to sell its entire shareholding in the company, the Economic Times reported.

"While the talks have been ongoing for some time, it is still work-in-progress as far as the specifics go. It may eventually not lead to a transaction at all," the newspaper cited one of the sources.

Separately, the Mint newspaper also reported on Wednesday that Tata Group could pay $500 million-$700 million for a controlling stake in BigBasket. The paper had earlier said that BigBasket was looking to raise $200 million for a fresh funding round and was in talks with the Tata Group.

 

Looking to go omnichannel, Tata may pick major stake in BigBasket: Experts

 Online grocer BigBasket, which is in talks with the Tata Group to sell a majority stake in the company according to reports could be doing this as they might not have a proper visibility in terms of investments from large investors, say experts.

“The competition which BigBasket faces now is with the big three -- Amazon, Walmart and Reliance. If BigBasket’s biggest investors want to bet on them, they will have to write a big cheque. A $10-15 million cheque will not help the company,” said Satish Meena, Senior Forecast Analyst at Forrester Research.

Hence, BigBasket is looking at someone with whom they can partner or at strategic investors like Tata who can top up the investment further, he explained.

According to reports, the Bengaluru-based online grocer is in talks with the salt-to-software conglomerate to sell around 50 per cent of its stake in the company for around $1 billion with China’s Alibaba, which is the largest investor in the company, looking for an exit.

BigBasket also fits the criteria for the Tata Group which is now looking at something in retail to go omnichannel because they realise that pureplay running the store is not going to help them in the long run. “So it will be a good deal for both of them if it happens,” said Meena.

“We keep talking to several firms but nothing has been firmed up. Our e-commerce play will be really big and we’ll not contend with a minor stake in any company,” a Tata Group spokesperson had earlier said in response to a potential stake purchase in BigBasket.

Earlier reports had also suggested that the Mumbai headquartered conglomerate was also in talks with Snapdeal and IndiaMart to buy stake in the companies to strengthen its online presence.

“For them to have serious play online, inorganic is the quickest route. So buying a majority stake in a player like BigBasket makes sense,” said Devangshu Dutta, Chief Executive of Third Eyesight.

In August, Tata Sons Chairman N Chandrasekaran had also made it public that the group was building a super app that would go live in December. The group’s holding company is overseeing the project, with inputs coming from consumer-facing businesses, including Trent, Croma, and Tata Cliq, among others.

Bigbasket bags milk delivery app DailyNinja, strengthens Bengaluru reach

Online grocery firm Bigbasket on Tuesday announced 100 per cent it had acquired online milk delivery app DailyNinja. The company, however, did not reveal details of the financial transaction. The acquisition will enable Bigbasket to consolidate in the subscription delivery space in Bengaluru. DailyNinja caters to around 110,000 customers daily.

Business with small traders is a key and growing part of Bigbasket's business. "DailyNinja currently has a large network of milkman partners which will enable us to expand our offerings under BBDaily," said Hari Menon, co-founder and CEO, Bigbasket.

"Our relationship with the key national brands as well as the supply chain built over the years will help us deliver a strong value proposition to them. We also aim to improve delivery productivity and achieve breakeven much sooner than planned," he said.

Sagar Yarnalkar, CEO and co-founder, DailyNinja said, "the acquisition is a great outcome for all of its team members, shareholders and founders. When we started DailyNinja 5 years ago, Bigbasket was the company we were hoping to emulate, and we are excited to be part of it now."

At present, the company said BBDaily makes about 160,000 deliveries per day including a wide range of fresh fruits and vegetables, bread, dairy and eggs. It also provides a vast array of daily essentials like breakfast cereals, personal and baby care products.

BBDaily will now have access to DailyNinja's network of 2000 milkman partners spread across India. The merger will be an opportunity for DailyNinja to grow its business to 2x within a month by leveraging Bigbasket's supply chain capabilities, and its customers will be able to access BBDaily's extensive non-milk range.

Grocery startup Bigbasket gets Rs 100 cr venture debt from Trifecta Capital

India's Bigbasket, valued at about $1 billion, will receive $14.5 million in debt from local venture capital firm Trifecta Capital, the online grocery start-up said on Monday.

The deal comes months after Bigbasket closed $150 million in funding from a group of investors, including South Korea-based Mirae-Naver and Chinese e-commerce giant Alibaba Group.

Bigbasket, which competes with Walmart Inc-owned Flipkart and Amazon.com Inc, will use the fresh funds to set up warehouses and boost its cold chain, the company said in a statement.

Vipul Parekh, co-founder of Bigbasket's parent group, noted that the venture debt allows the company to limit dilution for its shareholders, but did not provide details on the nature of the debt.

Mirae Asset-Naver Asia Growth Fund (Mirae-Naver), a leading investor operating in global growth markets, the UK Government’s development finance institution, CDC Group and Alibaba Group said on Monday that they led a $150 million round of fundraising for Supermarket Grocery Supplies Pvt Ltd (SGSPL), which owns Bigbasket brand.

The financing round, which Mirae-Naver has led through one of its funds, marks the Group’s largest investment in India. Mirae Asset-Naver Asia Growth Fund is a joint venture between Seoul-based Mirae Financial Group and Naver Corporation, South Korea’s leading internet company. Alibaba Group, which had previously led the Series E round at SGSPL in 2017, participated in the current financing round as well. The Jack Ma-led group aims to enable the growth of local Indian companies like SGSPL, as more and more users come online in the country.

CDC has been investing in India for over 30 years. It has committed more than $1.7 billion to the country and has been an investor, directly or indirectly, in over 300 companies. Its primary aim is to support responsible commercial growth that increases employment and access to services that improve quality of life. All financial returns are reinvested into more impact focused businesses.

Founded in 2011, SGSPL is headquartered in Bengaluru and serves resellers in 10 metro cities and 15 Tier-II cities.

The proceeds of this round will be used to finance SGSPL’s growth through further penetration into existing markets with more investments in the first mile, scaling up its supply chain and developing new reseller channels.

Commenting on the investment, Ashish Dave, Head of India Investments for Mirae Asset Global Investments, said, “SGSPL offers a transformational and convenient experience to its consumers, which makes it a preferred grocery platform. As India moves towards organised retail that offers standardised quality, comfort and speed in the shopping experience, we firmly believe the bigbasket brand will continue to define this segment as a category leader.”

BigBasket’s founder V S Sudhakar said his company was reengineering its supply chain to allow for faster delivery to its resellers and to reduce the time from farm to customer. "We are also scaling up the back-end supply chain for our new businesses- BB Daily that deliver’s fresh milk and other fresh products and BB Instant that creates a network of vending machines. This coupled with an expansion in our range of private label products will create a solid foundation for growth in both revenue and profitability," he added.

BigBasket to invest $100 mn to set up vending machines, distribution points

Alibaba-backed company BigBasket is pumping in $100 million (about Rs 698 crore) to strengthen its supply chain by setting up vending machines and smaller distribution centres across various cities it operates in.

The online grocery platform -- which is registered as Supermarket Grocery Supplies -- had recently raised $150 million in funding, led by Mirae Asset-Naver Asia Growth Fund, CDC Group and Alibaba Group.

Founded in 2011, BigBasket operates in 25 Indian cities. It plans to utilise the proceeds of this fundraising - which has placed the Bengaluru-based company in the unicorn club (companies with valuation of $1 billion and above) - to further penetrate into existing markets with more investments in the first mile, scaling-up of its supply chain and for developing new reseller channels.

"We want to enable two-hour delivery in top 10 cities that we operate in by July this year. For that, we have been investing in strengthening our distribution centres. We have 18 large and 80 smaller distribution centres together with our resellers and this will be ramped to 20 large and 100 smaller ones by June this year," BigBasket co-founder Vipul Parekh told PTI.

This move will help BigBasket reduce delivery time and ensure quality of dairy and fresh produce, he added.

The company expects its capital expenditure towards these initiatives to be about $100 million this year.

"We are ramping up our milk subscription business - BB Daily - under which we have built the supply chain to deliver milk and other items in the morning. The service was started around September last year and our sellers already carry out 90,000-100,000 orders a day. We are aiming to take this to a million orders a day and a stronger supply chain infrastructure will play a key role in this," he said.

Another area where the company is investing is in towards setting up unmanned vending machines - BB Instant - in office and apartment complexes.

"We see a huge potential of these machines. Customers can use their app to access the machine and buy products. The only human intervention is in re-stocking. We have already placed such machines at 200 sites in Bengaluru and over the next one year, we want to have 2,000 such sites across the 10 large cities where we operate," Parekh said.

Also, given that these machines are placed within apartment and office complexes, the risk of vandalism is lower.

Parekh said with these investments, BigBasket - which competes with SoftBank-backed Grofers as well as Amazon.in and Walmart-owned Flipkart - will continue to build further on its leadership in the grocery business.

"We have been re-engineering our supply chain to allow for faster delivery to our resellers and to reduce the time from farm to our customers. This coupled with an expansion in our range of private label products will create a solid foundation for growth in both revenue and profitability," Parekh said.

Bigbasket turns unicorn with $150-mn funding; valuation jumps over twofold

In a major boost to the start-up ecosystem, two of India’s promising start-ups joined the elite unicorn club in a matter of one week.

Bigbasket, a leading online grocery delivery firm, has just sealed a Series F round at an estimated valuation of around $2.3 billion — over twofold jump, when compared with its last reported valuation of $950 million.

The Bengaluru-headquartered company has raised a total of $150 million (approximately Rs 1,000 crore) in this round, from new and existing investors, company filings sourced from business intelligence platform Paper.vc, showed.

The round was led by existing investor Alibaba, a Chinese e-commerce giant, while Seoul-based financial services group Mirae Asset, and CDC Group, a development finance group linked to the UK government, also participated.

While Mirae put in around $60 million, Alibaba pumped in around $50 million. CDC, which had earlier seen successful exits from online fashion platform Jabong, has put in $40 million into the round.

Alibaba had led a $300-million round in Bigbasket in early 2018.

“Following this Series F investment led by Alibaba, our estimate of the post-money valuation of Bigbasket is $2.28 billion.

We also believe that the company is likely raise more money as part of this financing round,” Vivek Duari, founder at Paper.vc, told Business Standard.

Hari Menon, the chief executive officer of the online grocer, could not be reached for comment.

Earlier this week, Delhivery, a Guruguam-based e-commerce-focused logistics start-up, saw its valuation topping $2 billion after Japanese telecom and internet conglomerate led a $413-million investment round through SoftBank Vision Fund.

The fresh capital is expected to provide Bigbasket the firepower to go deeper into the online grocery segment where competition seems to be intensifying. Earlier this month, Grofers announced closing $60 million from SoftBank, while marketplaces such as Amazon and Flipkart are also learnt to be doubling down on the grocery segment.

Started in 2011 by Hari Menon, V S Sudhakar, Vipul Parekh, Abhinay Choudhari, and V S Ramesh, who co-founded Fabmart.com in 1999, Bigbasket has already positioned itself as the largest grocery delivery firm. The company, which is also backed by investors such as Helion Ventures Partners, Bessemer Venture Partners, and International Finance Corp, now operates across 32 cities, with annual revenue of ~350-400 crore.

Grofers trails with Rs 150-200 crore annualised revenue, followed by Flipkart Supermart and Amazon Pantry, both of which have committed large investments to scale the grocery business.