Exclusive: BigBasket raises $60 Mn from Alibaba and others

Online grocer BigBasket has raised $50-60 million in a bridge round led by Alibaba and other existing investors, according to four people familiar with the matter. This comes after the Bengaluru-based firm has been looking to raise fresh capital for about 8-10 months but was not able to do so. 

“The round materialised about two weeks ago. It’s a much-needed capital for BigBasket that has been witnessing a surge in demand due to Covid-19,” said one of the people cited above requesting anonymity. “Other existing investors including Mirae Asset and CDC Group also participated in the round.”

Entrackr couldn’t independently verify the participation of any new investor.

BigBasket has been in the market to raise a new round almost a year now, say sources. This has been evident from the size of venture debt raised by BigBasket since mid-2019. The company raised Rs 100 crore in debt from Trifecta in July.

BigBasket attained the coveted unicorn status — with a valuation of over $1 billion — when it raised $150 million in a Series F round from Alibaba, UK Government-owned CDC Group and South Korea’s Mirae Asset Global in March 2019. The financing round valued it at around $1.2 billion. 

However, the current round appears to not have changed the valuation. 

“BigBasket’s valuation has remained flat in this round,” said the second person cited above. “It will help them extend the runway by over six months as the company’s monthly burn is in the range of $8-10 million.”

BigBasket’s double-digit round is also reflective of the current scenario where top unicorns which were initially expected to raise triple-digit rounds have been reduced to sub $100 million. 

“Investors are not writing big cheques and looking at funding an amount that is actually needed by the company,” said an investor in the space, requesting anonymity. “Many of the unicorns will not raise triple-digit rounds and even the valuations will be more rational now.”  

Entrackr's detailed questionnaire sent to BigBasket didn't elicit any immediate response. We will update the post as and when it responds.

According to sources, BigBasket’s order numbers had plateaued to 150,000 daily orders over the last one year leading to fundraising challenges. However, its milk subscription vertical BBDaily has grown at a quick pace which clocks close to 1.8 lakh daily orders, add sources. It’s worth noting that BigBasket had acquired three firms in the space including DailyNinja and RainCan to bolster BB Daily. 

That said, the tide for online grocery delivery companies including BigBasket seems to have changed as the ongoing Covid-19 pandemic induced lockdown has let Indians discover the convenience of shopping for groceries online. Industry experts believe that this situation will lead to behavioral changes which will in turn boost orders for online grocery firms.

“This could be a big tailwind for BigBasket because even after the [Covid-19] situation improves, there will be a behavioral shift among users which will work in the favor of online grocery companies in the long run,” said one of the sources cited above, requesting anonymity. 

"A lot of people who would have never used an online service are now ordering online. So, companies like BigBasket are getting a lot of traffic without splurging anything on marketing and promotions which will improve margins.”