BigBasket, India’s biggest online supermarket, is in the process of raising about $150 million in funding from investors including Alibaba.
South Korean firm Mirae Asset and U.K. government-backed development finance institution CDC Group are also contributing to the round, according to Deal Street Asia. This latest round of funding brings the startup’s valuation to between $2 billion and 2.3 billion.
Bangalore-based BigBasket plans to use the funds to expand across major metro areas in the country, acquire smaller startups and expand into new categories, including beauty products and meat.
A filing from the Ministry of Corporate Affairs revealed that Alibaba will subscribe to 437,500 Series F compulsory convertible preference shares (CCPS) for $50 million, while Mirae Asset will be given 524,990 CCPS at a value of $114.29 per share, or $59.9 million. CDC will get 350,000 CCPS for $40 million.
This isn’t the first time that Alibaba has invested in BigBasket. Back in 2017, Alibaba invested $200 million in the company, leading a $280 million funding round.
At that time, BigBasket had been in negotiations with Alibaba for several months after previous talks with Amazon fell through. And competition in the grocery market has been heating up between the two eCommerce giants for some time. 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. In fact, last year Amazon announced it was expanding its grocery offerings in India, as it anticipates the market will account for over half of its business in India in the next five years.
Amit Agarwal, the head of Amazon India, said in an interview that groceries and items such as creams, soaps and cleaning products were already the largest product category on the site in terms of number of units sold in India.
“I would not speculate on when we would launch AmazonFresh — but, absolutely, if you ask me the next five years’ vision, from your avocados to your potatoes, and your meat to your ice cream, we’ll deliver everything to you in two hours,” he said at the time.
“Probably, in the next five years, groceries and consumables would be more than half of our business,” he added.