Alibaba backs Indian online grocer BigBasket in $300 million fundraising

Reuters News
Posted: Feb 02, 2018 8:54 AM

MUMBAI (Reuters) - India's leading online grocer BigBasket has raised $300 million in a funding round led by China's Alibaba, giving it more firepower to compete with U.S. rival Amazon.

An Alibaba unit invested $146 million, subscribing to compulsorily convertible preference shares, BigBasket said a filing to Indian regulators.

BigBasket, which sells everything from vegetables to frozen meats to soap and shampoo, gave no breakdown of the fundraising but said it would use the funds to build farmer networks and expand deeper into Indian cities where they operate.

"BigBasket is delighted to receive this funding from Alibaba, which will essentially be directed towards growth and consolidation. The multinational e-commerce retailer fits in best with what we believe in," chief executive Hari Menon said.

Bengaluru-headquartered BigBasket, which researcher Forrester estimates accounts for roughly 40 percent of India's $750 million online grocery market, is competing with SoftBank-backed Grofers and Amazon's India unit for a bigger slice of the market.

Founded in 2011, BigBasket has more than 6 million registered customers and operates across 26 Indian cities.

Alibaba, through its units, holds various investments in India's fast-growing online retail space, including a stake in the parent of top digital wallet firm Paytm.

Sands Capital Pvt Growth Ltd, International Finance Corp and Abraaj Basket I Pvt Ltd also invested a total of $50.8 million in BigBasket as part of the latest round, according to the filing.

It was not immediately known who invested the remainder of the total $300 million.

BigBasket and Alibaba did not immediately respond to requests seeking comment.

(Reporting by Sankalp Phartiyal; Editing by Devidutta Tripathy and Alexander Smith)