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Alibaba, Temasek and Fosun in talks to invest in BigBasket

19 July, 2017

Chinese ecommerce major Alibaba is in talks to pick up a stake in Bangalore-based online grocer BigBasket, according to a media report.

The move comes after media reports said online marketplace Paytm Mall, which is majority-owned by Alibaba Group Holdings, is in an advanced stage of discussions with the homegrown e-grocer for investing about $200 million for a significant minority stake.

Separately, the online grocer is also in talks to raise funds from Singapore’s sovereign wealth fund Temasek Holdings and China’s Fosun Group, The Economic Times reported.

BigBasket is seeking a pre-money valuation of around $550 million while Alibaba, along with Paytm Mall, is looking to invest $200 million in BigBasket at a valuation of nearly $900 million post the investment. The due diligence for the deal has already started, according to the report.

As for Temasek, it is unclear if it will join the ongoing funding round with Alibaba and Paytm Mall or wants to invest directly in BigBasket later. Fosun’s venture capital arm Kinzon Capital, on the other hand, is in discussions with BigBasket for co-investment in the ongoing funding round with a cheque of $20-30 million, the newspaper reported.

BigBasket founder Hari Menon said the report is “completely untrue.” Alibaba and Temasek did not respond to queries from VCCircle. Fosun could not be immediately contacted.

Last month, Amazon entered into a 60-day exclusivity agreement with BigBasket for a possible acquisition. However, the talks seem to have fizzled out over differences in valuation.

An investment in BigBasket will give Paytm the firepower to fight Amazon, which has just received the government’s nod to invest $500 million in India’s food retail sector.

The possible investment should be viewed in the backdrop of Paytm’s broader alliance with Alibaba which has been spearheading consolidation in the e-commerce space.

“It’s going to be an Alibaba versus Amazon play in the long run,” Ankur Bisen, senior vice president at Technopak Advisors, recently told VCCircle.

In March this year, Paytm Mall, which is operated by Paytm E-Commerce Pvt. Ltd, received $200 million in funding from Alibaba and venture capital firm SAIF Partners. Following the investment, Alibaba’s and its affiliate Ant Financial’s stake in Paytm E-Commerce rose to 62% from 40%.

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Alibaba, Temasek and Fosun in talks to invest in BigBasket

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