As Walmart, Amazon loom, Big Basket eyes $500 mn war chest
BENGALURU: Big Basket, India’s largest grocery start-up, is in talks with investors to build a large war chest to prepare for a long drawn-out battle with deeppocketed rivals Amazon India and Walmart Inc., the latter of which is nearing a deal to buy online retailer Flipkart, three people aware of the discussions said.
Big Basket, which raised $300 million from Alibaba Group Holding Ltd and others in February, is in talks to raise between $300 million and $500 million from Alibaba and new investors, the people cited above said, adding that the talks are at an initial stage. All three people requested anonymity.
While Big Basket is in talks with new investors, it is possible that the funds could be raised entirely from existing investors led by Alibaba, one of the three people said.
Although Big Basket does not require additional funds immediately, it wants fresh capital because the grocery business will likely be a priority for both Walmart and Amazon and they are expected to pump in hundreds of millions of dollars into the business, the people cited above said.
Additionally, given that the start-up ecosystem is currently enjoying an uptick in fundraising after more than two years, Big Basket wants to fill its coffers.
“For Big Basket, it makes sense to take advantage of the current funding environment and raise money while they can,” said the first person cited above.
Big Basket is also aggressively expanding and undertaking a number of new initiatives. Some of its initiatives include launching offline stores and kiosks, as well as a subscription service. The company is also looking at acquisitions of two smaller rivals, Milk basket and Daily Ninja, Mint reported last month.
Big Basket is also attempting to strengthen its capabilities in the so-called micro-delivery space— the delivery of a relatively small number of daily essentials such as dairy products, fresh fruits and vegetables, within a few hours of an order being placed.
According to the second person mentioned above, Big Basket is also in the middle of re-organizing its supply chain to make it more efficient and to help strengthen its capabilities for same-day deliveries.