Exclusive: BigBasket in talks with Temasek for $100 Mn potential funding

Online grocery has turned hyper-competitive after the entry of JioMart and the country’s second and third largest e-grocers BigBasket and Grofers have been feeling the heat. To maintain their positions, the duo need to raise large funding rounds and BigBasket appears close to raising a fresh round. 

The Bengaluru-based venture is in talks to raise up to $100 million led by Temasek, said three sources aware of the conversation. “The talks have been on for the past few weeks. Temasek could invest anywhere between $50 to 70 million,” said one of the sources on condition of anonymity. Existing investors including Mirae Asset and CDC Group are likely to join.”

Early this year, BigBasket had raised $60 million bridge financing from Alibaba and the aforementioned existing investors in April. Entrackr had exclusively reported the funding round in April. It’s worth noting that Alibaba couldn’t leverage the automatic route to infuse equity capital in BigBasket due to change in FDI regulations.

Following the tension over the border, the Indian government had barred Chinese and other bordering investors from putting money in local companies without its approval since June. 

“The valuation of BigBasket will not see any significant increment. More or less it would be the same as the last round raised in April,” added the second source who also wished not to be named. To be sure, the deal may or may not materialize.

Entrackr queries sent to BigBasket and Temasek didn’t elicit any immediate response. We will update the story as and when they respond.

Sources emphasised that BigBasket has a monthly burn of around $7-8 million and the last fundraise would last until November-December. In May, BigBasket had claimed to reach Rs 650 crore in monthly sales. Besides grocery, the company also runs subscription commerce platform BB Daily. 

With BB Daily, BigBasket clocks around 300K orders per day.

The face of online grocery changed after the entry of Reliance’s JioMart. Within a few months of its launch, the platform has emerged as the largest e-grocer in the country. According to Entrackr's sources, JioMart does over 600K orders every day. The quick growth of the platform has put BigBasket and Grofers in an uncomfortable position. 

Since profitability for both companies is nowhere close, they need to raise large funding rounds to deal with JioMart’s onslaught. Analysts and entrepreneurs in the skin of the game believe that the market is large enough to accommodate multiple players, but it won’t be an easy ride for both BigBasket and Grofers.