Mumbai: Chinese e-commerce giant Alibaba has led a $300-million funding round in online grocery player BigBasket.The deal is expected to give BigBasket more muscle to compete against rivals such as Grofers and e-tailing giant Amazon.
Other investors who participated include Abraaj Capital, Sands Capital and IFC.
The company plans to use the investment to build its farm network and expand deeper into existing cities.
"BigBasket is delighted to receive this funding from Alibaba, which will be directed towards growth and consolidation. The multinational e-commerce retailer fits in best with what we believe in," BigBasket co-founder and CEO Hari Menon said. He added that the funds would be directed towards strengthening the company's technology, analytics and infrastructure.
According to Menon, the online grocery player is currently partnering about 1,800 farmers throughout the country and aims to become the "most preferred partner" for up to 3,000 of them.
The company said it was planning to "dig deeper" into the cities it already has a foothold rather than focus on expansion into more cities.
The deal estimates BigBasket's valuation at over $900 million after the transaction. The company had recently crossed the 8-million customer mark. It closed the previous financial year (2016-17) with Rs 1,410 crore in revenue and is making profits in Bangalore and Hyderabad. BigBasket expects to reach the break-even-point in Calcutta, Ahmedabad and Chennai in the next three months.
Operational in 30 cities, the company is clocking Rs 200 crore in terms of monthly run- rate. It expects this number to increase to Rs 300 crore in August and touch Rs 500 crore in March 2019.
In November, Alibaba - which is also an investor in Paytm - had sought the approval of the Competition Commission of India for a acquiring a stake in BigBasket.
Funds for Zomato
Alibaba's affiliate Ant Small and Micro Financial Services Group (Ant) has invested about $200 million in online food ordering app Zomato.
In a regulatory filing, Info Edge (a large shareholder in Zomato) said Zomato had signed a definitive agreement to undertake a primary fund raising of around $150 million from Ant.
While Zomato declined to comment, industry analysts said the deal values Zomato at over $1 billion. The sale transaction is expected to be completed by April 15.
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.
In addition to online payments, Alipay is expanding to in-store offline payments, both in China and outside.
The consolidated net sales of Zomato - which competes with players such as Swiggy and UberEATS - stood at Rs 332.2 crore during 2016-17.
Zomato.com generates revenue from advertisements of restaurants and lead sales.
Alibaba has been aggressively investing in the Indian market. In 2015, it had invested in e-commerce major, Snapdeal. Recently, the Chinese firm pumped in USD 300 million in online grocery platform, bigbasket.
