The country’s top online grocer BigBasket has entered into a 60-day exclusivity agreement with retail giant Amazon after a prolonged period of discussions between the two over a potential acquisition by the latter, a report in a national daily stated, citing two people aware of the development.
The agreement mandates that Amazon will be sole contender to acquire BigBasket for a two month period, The Times of India report stated. However, the agreement does not stop the e-grocer from actively looking out for financial investments, the report added.
Sources told the publication that BigBasket is simultaneously seeking to raise fresh funds as it is not sure whether the deal will go through after Amazon’s due diligence process.
In April this year, Hari Menon, chief executive of BigBasket told VCCircle that the company has started preliminary discussions for its next fundraising exercise, targeting an investment ticket size of over $100 million.
According to the TOI report, the company was valued at $450 million during its last round of funding and has been exploring a sale deal at around $700 million. Reportedly, the deal is getting delayed over disagreements on its valuation.
Amazon declined to comment on the development, while an email query sent to BigBasket did not elicit any response at the time of publishing this article.
BigBasket, owned by SuperMarket Grocery Supplies Pvt. Ltd, has been staring at a potential Amazon buyout for some time as the US-based e-commerce giant looks to capture a significant portion of the Indian grocery and food retail segment. Amazon has committed to invest $515 million (Rs 3,368 crore) over the next five years into India’s food-retailing sector. It currently already offers online delivery of groceries and daily essentials through its app Amazon Now and its online supermarket service Amazon Pantry. Besides an online portal, the company will also open brick-and-mortar outlets.
The Bangalore-headquartered e-grocer has raised nearly $250 million so far and registered an over-three-fold increase in revenue to Rs 563 crore for the financial year ended 31 March 2016. BigBasket has expanded its operations to over 30 cities from six last year and signed up Bollywood actor Shah Rukh Khan as brand ambassador. It is betting big on its private-label business and expects to become profitable by March 2018.
Earlier this week, Bloomberg reported that Amazon had held preliminary discussions to buy BigBasket. The online grocer, however, denied any such move, according to the report.
SuperMarket Grocery Supplies is a wholesale products supplier to BigBasket and owns the brand. A separate firm, Innovative Retail Concepts Pvt Ltd, runs the BigBasket property under licence from SuperMarket Grocery.
In early December last year, the company had claimed that it saw 300% growth in revenue in the last one year and expects to cross the Rs 2,000-crore milestone by the end of this fiscal.