Paytm Mall to invest $200 million in BigBasket

Paytm Mall

BigBasket continues to be an interesting investee. This time, online marketplace Paytm Mall is likely to invest $200 million in the Bengaluru-based grocery firm for a significant minority stake, according to the ET report.

Earlier, online e-commerce major Amazon had shown investment interest in the company but the sale talks have been stuck for the past few weeks over the company’s valuation.

The report also stated that BigBasket is seeking a pre-money valuation of at least $550 million. The company was valued at about $450 million when it raised capital in March last year.

The deal seems to be a strategy to take on Amazon in the grocery segment. Paytm Mall aims to strengthen its online-to-offline strategy using BigBasket’s partnerships with corner stores.

Amazon will soon begin selling groceries and other food products online after it recently got the government’s approval for its proposed $500 million foreign direct investment in the business.

Recommended read: Why owning Bigbasket makes sense for Amazon

BigBasket’s discussions with Paytm Mall come after the online grocer explored various strategic options, include a sale to Amazon and a merger with SoftBank-backed Grofers. BigBasket had been discussing a fundraising from financial investors as well.

Investment bank Morgan Stanley is advising BigBasket in these talks.

BigBasket is an old player and has been working to continuously evolve the business. It has tried various models and successfully implemented them. The company also has private labels including Fresho for fruits and vegetables and Happychef for gourmet foods.

It also started express delivery in 60 minutes last year to take on Grofers. The company registered about Rs 1,400 crore in revenue in fiscal year 2017.

Amazon India has already started building its infrastructure for retailing fresh produce through its platform, besides building a significant presence in the segment through products like Pantry and Amazon Now.

Rival marketplace Flipkart has also announced plans to enter the online consumer goods and grocery sector by July.

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