BigBasket may raise fresh funds at $2 billion valuation

BigBasket is reportedly in talks to raise fresh funds to the tune of $300-400 million that could propel it into the coveted unicorn club. The buzz is that it is in talks with at least one new investor as well as existing investors and has even received a term sheet.

If things go to plan this would be the second time that India's largest online grocery startup would have raised funds this year. Back in February, it had raised $300 million Series E funding in a round led by Alibaba, China's largest e-commerce firm, at a valuation of roughly $800 million.

Sources aware of the discussions told Mint that the funding round is likely to value the Bangalore-based startup at $1.5-2 billion, but the name of the new investor is yet to be ascertained. This development comes amid media reports that BigBasket's talks to merge with Grofers have fallen through.

BigBasket, founded in December 2011 and operated by Supermarket Grocery Supplies Pvt. Ltd is the market leader in the online grocery segment and easily the most well-funded player in this space. It is trying to expand its lead on the back of its February fundraising, before an escalation in the market share war with Walmart-backed Flipkart and Amazon. Both these players are investing heavily to boost their respective grocery businesses in an attempt to grab a bigger slice of the e-grocery market, pegged to cross $2.5 billion in the next fiscal.

A source told the daily that BigBasket plans to use the fresh funds to expand aggressively across major metros in the country, acquire smaller startups that will fill gaps in its offerings and expand into new categories such as beauty products and meat. For instance, earlier this month, BigBasket had announced the acquisition of three companies, Morning Cart, RainCan and Savis Retail, thereby making a debut in the micro-delivery and omnichannel commerce turfs. 

"We will hit the Rs 300-crore mark in September [in gross monthly sales] and Rs 500-crore in March [2019]. Everything in the organization is gearing up towards these two numbers," Hari Menon, co-founder, and chief executive of BigBasket, had told the daily in Mint. That's a 30% and 117% jump over the gross monthly sales of Rs 230 crore recorded in March 2018. Menon had added that BigBasket was not only aiming to become operationally profitable in all the eight tier-I cities it operates in by the end of this fiscal, but also touch a $1 billion gross sales run rate by then.