Suitors line up at BigBasket; India's biggest online grocer set to become even bigger
The Alibaba-Paytm Mall combine, which has begun due diligence, has offered to invest $200 million in BigBasket at a valuation of nearly $900 million post the investment, these people said, declining to be identified. That’s in line with what the grocery startup was seeking and double what it was estimated to be worth when it raised capital in March last year.
ET reported last week that Alibaba backed Paytm Mall was in talks to acquire a significant minority stake in BigBasket.
As for Temasek, it is unclear yet if it will join the ongoing funding round with Alibaba and Paytm Mall or wants to invest directly in BigBasket later. Fosun’s venture capital arm Kinzon Capital, on the other hand, is in discussions with BigBasket for coinvestment in the ongoing funding round with a cheque of $20-30 million. “It is for the founders to decide who they would like to go with,” one of the people mentioned above said.
A spokeswoman for Alibaba declined to comment on what she said was “market speculation.”
“As matter of policy, we do not comment on market speculation and rumours,” said an associate on behalf of Temasek in response to ET’s queries. BigBasket did not respond to ET’s emailed questions.Fosun could not be immediately reached for comment.
In an interview last week, Paytm founder Vijay Shekhar Sharma said that investment in an egrocer was in line with the company’s online-to-offline strategy. Paytm Mall, which was spun out from parent One97 Communications this year to an entity called Paytm Ecommerce, received an infusion of $200 million in March from Alibaba and SAIF Partners.
Alibaba, which along with its payments affiliate Alipay owns more than a 50% stake in Paytm Mall, has been doubling down on grocery and physical retail investments globally. In November, Lazada, an Alibaba backed ecommerce platform in Southeast Asia, acquired Singapore-based online grocer RedMart. Alibaba is also investing $305 million in offline discount supermarket chain Sanjiang Shopping Club in China.
Amazon, too, is focusing on the online grocery market in India. The company is likely to begin directly selling groceries and other food products online after recently securing the government’s approval for its proposed $500-million foreign direct investment in the business.
BigBasket, which was valued at $450 million during its previous fundraising led by Dubai-based Abraaj Group, was in discussions with Amazon for an investment but the talks reached a stalemate over various issues, including valuation. The two parties have held talks multiple times and could revive discussions.
BigBasket had also explored a merger with SoftBank-backed Grofers alongside holding fundraising discussions with financial investors.
Investment bank Morgan Stanley is advising BigBasket in its talks.