Online milk delivery startup MilkBasket appears to have found a home. Reliance is all set to acquire the subscription commerce company, said three people aware of the details of the transaction. The Gurugram-based firm that delivers groceries, milk and other every day essentials has been looking for an acquisition for the past six-eight months.
“The talks have reached the last stage and both parties have agreed upon contours of the deal. Reliance already offered a term sheet early this month and the transaction could be announced soon,” said one of the people requesting anonymity.
This is the second round of talks between the two companies. “Unlike the previous talk that didn’t materialise, Reliance and MilkBasket are close to signing the deal. The size of the deal is in the range of $40-43 million,” said the second person who also wished not to be named.
The initial talks of the second round of discussion cropped up last month when Kalaari Capital sold its stake to Mahendra Nahata-led MN Televentures. According to an ET report, the transaction was resisted by the co-founders and other stakeholders as Nahata reportedly has close ties with Reliance.
“MilkBasket’s Chief Executive Officer and co-founder Anant Goel will join Reliance whereas the other co-founders will move after the completion of the transaction,” said the person quoted above. “The acquisition will offer almost no upside for investors.”
MilkBasket has raised $33 million in total risk capital from Inflection Point Ventures, Mayfield India, Unilever, Beenext, Blume Ventures, Kalaari, Lenovo Capital and a host of angels including several family offices. In the past, the company was also in talks with Amazon and BigBasket for acquisition.
Entrackr’s immediate queries to Reliance didn’t elicit any response whereas Goel has declined to offer any comment for the story.
Founded in 2015, MilkBasket was hailed as a local innovation because of its subscription model in daily essentials. Unlike most e-commerce platforms, it has a sticky customer base (household) who buy almost every day. However, experts believe that MilkBasket was a late entrant in the e-grocery space and by then heavy-weights including SoftBank, Tiger Global, Alibaba and Mirae had taken their bets.
As a result, there was almost no appetite to invest in the new models in the grocery space. This could also be noticed from casualties and stress acquisitions such as DailyNinja, Doodhwala and RainCan. Several companies including Noida-based MrNeeds were also forced to cease operations.
With this likely acquisition, independent plays in the grocery subscription commerce space would come to an end. Reliance will likely leverage the Goel-led company to ramp up its subscription commerce platform that has been on a pilot mode since last year.