BigBasket, India’s leading startup in the online grocery market segment is holding talks with its existing investors to raise capital worth $500 million to compete with e-commerce market leaders Amazon and Flipkart (post-Walmart acquisition).
BigBasket already raised a colossal $300 million funding led Alibaba Group Holding Ltd and others in February and are now beginning negotiations to raise between $300 to $500 million from the Chinese conglomerate and new investors, according to three anonymous sources close to the company.
Although BigBasket is also holding talks with new investors, the sources believe that most of funds will be raised entirely from existing investors and majorly Alibaba.
BigBasket is not in need of any additional funds right now, but it wants to be prepared for a tough battle that seems looming since Amazon is gearing up to step in the online grocery retail market and Walmart will likely make the grocery market a top priority after acquiring Flipkart. Therefore, the company wants to be all geared up and ready to battle against the deep-pocketed American giants beforehand, and keep its market share.
Moreover, BigBasket wants to capitalize on the rewarding fundraising momentum the Indian startup ecosystem is currently witnessing after more than two years of struggle to attract investors.
For BigBasket, it makes sense to take advantage of the funding environment and raise money while it can,
said one of the sources.
BigBasket is currently putting a lot of efforts in coming up with innovative ways of keeping its customer base satisfied while pushing expansion plans quickly. For example, they are launching offline stores and kiosks and came up with a new subscription service. Additionally, the startup is acquiring smaller competitors such as Milkbasket and DailyNinja.
BigBasket is also maximizing on the development of a micro-delivery space, which relates to the delivery of small daily essentials like milk products, vegetables and fruits in a short lapse of time after order placement. One of the sources also added that Bigbasket is currently updating its supply chain as a bid to improve efficiency and reliability of its same-day deliveries.
It’s not like BigBasket is scared of the prospect of battling Amazon and Flipkart-Walmart. But they recognize that with Walmart’s entry, this will be a long-drawn-out battle against even deeper-pocketed rivals and that it needs to have a big enough war chest to have a reasonable shot at maintaining its leadership position,
said one of anonymous sources.
BigBasket, founded in December 2011 and operated by Supermarket Grocery Supplies Pvt. Ltd is the leading firm operating in the online grocery market sector and is currently backed by colossal funds it raised recently, bringing its valuating to $950 million. The company aims at retaining and increasing its market share and providing a better service.