Mirae Asset leads $150-mn investment round in BigBasket

Mirae Asset leads $150-mn investment round in BigBasket

Mirae Asset leads $150-mn investment round in BigBasket
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SuperMarket Grocery Supplies Pvt. Ltd, which owns online grocer BigBasket, is raising $150 million (about Rs 1,040 crore) in a fresh round of funding led by South Korean firm Mirae Asset.

Mirae Asset will put in $59.9 million in this round, filings with the Registrar of Companies (RoC) show. UK government-owned development financial institution CDC Group Plc will contribute $40 million while China’s Alibaba Group, BigBasket’s largest shareholder, will invest $50 million.

According to TechCircle estimates, the investment will increase the Bengaluru-based company’s valuation to $2-2.3 billion.


BigBasket had achieved the unicorn status in February last year when it raised $300 million in its Series E round of funding led by Alibaba. Though BigBasket had crossed $1.6-1.8 billion in valuation by TechCircle estimates at the time, a person close to the company had pegged it at $950 million.

Once the latest transaction is completed, Alibaba will hold 26.26% stake in BigBasket, Mirae Asset will own 5.31% stake while CDC’s shareholding will stand at 3.54%. 

Private equity firm Abraaj Group is currently the second-largest shareholder in the company with 17.16% stake. BigBasket’s other major shareholders include homegrown private equity firm Ascent Capital and venture capital firms Helion Venture Partners, Sands Capital, Bessemer Venture Partners and International Finance Corporation (IFC).


Update: BigBasket announced the fundraising on May 6.

The funding round was led by Mirae Asset-Naver Asia Growth Fund, a joint venture between Seoul-based Mirae Financial Group and South Korean internet company Naver Corporation.

The deal marks Mirae-Naver's largest investment in India, according to a press statement.


Grocery competition

BigBasket’s big-ticket fundraise comes at a time when the competition in the online grocery space has been heating up. Grofers, its main like-for-like rival, last month secured $60 million in a round led by Japanese conglomerate SoftBank. The Gurugram-based company raised the follow-on funding at a post-money valuation of $424 million.

Meanwhile, Walmart-owned Flipkart and US-headquartered e-commerce giant Amazon have also been aggressively expanding their grocery verticals. 


Amazon offers online delivery of groceries and daily essentials through its app Amazon Prime Now, while horizontal e-commerce rival Flipkart has also been getting its hyperlocal service off the ground. 

Amazon, which also owns a food processing and retail unit, resumed its grocery service after the online retail giant faced disruption from revised e-commerce norms which kicked in on February 1. 

Flipkart CEO Kalyan Krishnamurthy recently stated that the company plans to invest heavily in groceries over the next three years and was exploring investments in or partnerships with offline grocery retailers.


In addition, food-tech unicorn Swiggy diversified its operations with the recent launch of a new hyperlocal service that offers home delivery of groceries and other daily essentials. 


BigBasket, which is currently the country’s top grocery e-tailer, operates in 30 cities. clocking Rs 200 crore in terms of monthly run-rate. At the time of the last funding announcement, chief executive Hari Menon had said that he wanted to bring this number to Rs 500 crore by March 2019, which would mean that the company would finish the current financial year with a Rs 6,000-crore exit run rate.

While SuperMarket Grocery Supplies is the wholesale products supplier, Innovative Retail Concepts runs the consumer-facing arm of the BigBasket property under licence from SuperMarket Grocery.

Direct sourcing from farmers is a part of BigBasket's business model. The company had earlier said it aimed to work directly with 3,000 farmers. It also has over eight million customers.

The company recently strengthened its business-to-business arm by expanding to the HoReCa (Hotels, Restaurants, and Caterers) segment and partnering with kirana stores in an effort to transform them into technology-enabled modern retail stores.

As part of its efforts to strengthen its micro-delivery operations, it acquired subscription-based e-grocery startup RainCan last October.

BigBasket’s wholesale business posted a 35% year-over-year rise in its operational revenues to Rs 1,583 crore from Rs 1176 crore for the financial year 2017-18. Also, SuperMarket Grocery Supplies Pvt. Ltd narrowed its consolidated net loss from Rs 659 crore to Rs 272 crore during the period.

Innovative Retail Concepts Pvt. Ltd, the retail arm of BigBasket, witnessed a 29% year-over-year jump in revenue to Rs 1,410 crore. Total expenses, however, increased to Rs 1,877 crore from Rs 1,516 crore during the period, a jump of 23%. The arm narrowed its losses 6% year-over-year to 179 crore for 2017-18.

*This article has been updated to include the formal announcement of the fundraise.

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