Tata Sons' subsidiary Tata Digital on Friday said it has acquired a majority stake in Supermarket Grocery Supplies (SGS), the parent and business-to-business (B2B) operator of e-grocer Bigbasket.
The Competition Commission of India (CCI) last month had approved Tata Digital’s proposal to acquire up to 64.3% in SGS through a combination of primary and secondary transactions.
“Grocery is one of the largest components of an individual's consumption basket in India and Bigbasket, as India's largest e-grocery player, fits in perfectly with our vision of creating a large consumer digital ecosystem," said Pratik Pal, chief executive of Tata Digital.
The deal will give Tata Digital control of Bigbasket’s retail and B2B business arms.
“As a part of the Tata ecosystem, we would be able to build stronger consumer connect and accelerate our journey,” said Hari Menon, chief executive of Bigbasket.
The transaction is understood to have facilitated exits for at least two early institutional backers including Alibaba Group and Actis LLP
Other investors such as Helion Ventures, CDC, Bessemer Venture Partners and South Korea’s Mirae Asset Venture Investments will continue to remain invested, a person told VCCircle.
The deal has resulted in an enterprise value of Rs 13,500 crore or about $2 billion for Bigbasket, according to media reports.
The grocery delivery startup was valued at $1.2 billion in October 2019, according to an auditor’s report, when it acquired hyperlocal grocery delivery platform DailyNinja.
In April last year, it raised around $60 million in a bridge round of funding led by Alibaba.
For the financial year 2019-20, SGS reported consolidated net sales of Rs 3,794 crore and losses of Rs 611 crore, as per VCCEdge data.
Bigbasket also operates a farm-to-fork supply chain with over 12,000 farmers and several collection centres across India.
The acquisition of the Bengaluru-based startup, which competes with giants Flipkart and Amazon, would tie into the conglomerate’s strategy of launching a super app for the group’s consumer-facing businesses.
In April 2021, Tata Digital committed to invest nearly Rs 100 crore in epharmacy and health technology platform 1mg which the conglomerate aims to acquire going by several media reports.
These acquisitions are expected to strengthen Tata’s proposed ecommerce play across retail, grocery, epharmacy and other sectors. It will also help the group take on Amazon, Reliance Industries, and Walmart-owned Flipkart in India's booming ecommerce market.