Chinese eCommerce giant Alibaba and India-based digital payment company Paytm are gearing up to invest around $200 million in Indian online grocer BigBasket.
According to a report in VCCircle, citing people familiar with the matter, an announcement about the investment could come any day. With the investment from the online retail platform and the eWallet provider, BigBasket would have a valuation of around $600 million, noted the report. U.S. eCommerce giant Amazon reportedly offered to make an investment but was rejected because it would give BigBasket a lower valuation of $450 million.
BigBasket has already raised approximately $250 million, reported VCCircle, and has expanded its business to nearly 30 cities from six last year. The online grocer raised $150 million in a funding round led by Dubai’s Abraaj Group last year, and $7 million in March from venture firm Trifecta Capital. The funds were funneled into new warehouses and strengthening BigBasket’s delivery network.
According to PYMNTS sources, the startup has been rapidly boosting revenue and recently broke even in two cities.
In June, reports surfaced Amazon was looking to purchase the Indian online retailer outright. Sources told Bloomberg that Amazon has been looking to gain traction in the ballooning Indian market. Perhaps the eCommerce retail platform sees BigBasket, which is run by SuperMarket Grocery Supplies Pvt, as the hand hold it needs in the country. The eTailer has a presence in approximately 25 cities across the subcontinent.
Amazon CEO Jeff Bezos said he planned to spend $5 billion in India to compete against local rivals in the coming years. Amazon’s pressure has already seen Flipkart Ltd. and Snapdeal, two of India’s largest domestic eCommerce players, pushed into a preliminary agreement to merge. Amazon has also sought approval to work with the Indian government in food supply and plans to invest nearly $500 million in online food retailing.