India’s Bigbasket Getting Even Bigger With Alibaba Investment

India’s biggest online supermarket Bigbasket is about to get even bigger. Chinese eCommerce giant Alibaba Group Holding Ltd. has said it will invest $200 million in the company, leading a $280 million funding round and garnering Alibaba a 25 percent stake in the startup.

That would bring Bigbasket’s valuation to $800 million, according to news from Bloomberg — that is, if it can get through the country’s antitrust authority, the Competition Commission of India. Sources familiar with the matter told Bloomberg that this is likely a done deal — a mere formality that should be completed any day.

The online grocery retailer delivers in 25 cities and sells 18,000 different products made by over 1,000 brands. Alibaba joins the likes of Abraaj Group and Sands Capital in backing the company and may soon be joined by an affiliate of One97, Paytm eCommerce Pvt.

According to Bloomberg, Bangalore-based Bigbasket has been in negotiations with Alibaba for several months over this investment. That’s on the heels of previous talks with U.S. eCommerce pioneer Amazon back in June.

When it comes to the grocery race between these two global eCommerce giants, India is still anyone’s game. Amazon Founder Jeff Bezos has said that his company will invest $5 billion in the country as it competes against local rivals such as Flipkart and Snapdeal (which considered a merger due to pressures from these international giants).

Growth can be a challenge in India, where logistics and infrastructure can put a cramp on expansion outside the larger cities. Several high-profile grocery startups have folded over the past few years.

Food cannot be safely stored and transported without warehouses and refrigerated trucks, which are in short supply. The only way to change that is significant capital expenditure, which is how Amazon plans to spend $500 million in the coming years. It received government approval to make a food retailing investment earlier this year, noted Bloomberg.