BigBasket is reportedly planning to raise funds worth nearly $150-200 million, owing to the rising opportunities of online grocery sales due to the nationwide COVID-19 lockdown.
In the initial days of the lockdown, supply chains were disrupted. However, e-Commerce has emerged subsequently as the most sustainable alternative for sourcing essential supplies including groceries. This has been prompted by the social distancing guidelines imposed by the government to curb the spread of coronavirus. The online grocer has appointed Morgan Stanley and Goldman Sachs to help raise the funds.
People with knowledge of the matter have stated that the company is eyeing a $2 billion valuation in the latest round. The lockdown is likely to impact consumers behavior in purchasing essentials via e-Commerce platforms. This has long been a mainstay for BigBasket and so it is expected to gain benefits from this tailwind.
In order to sustain in the rapidly rising trend of online purchasing, Zomato, a food aggregator, also has commenced grocery deliveries since April. Additionally, e-Commerce startup, Meesho, Paytm Mall, and Snapdeal, among others, have expanded to or entered the grocery delivery services.
The recent fundraising round could reportedly be the last private capital infusion round in this online grocer before it goes public. The company is planning to go public either overseas or in India following a year from this fundraising round.
However, the recent change in FDI (foreign direct investment) policy is expected to pose some inconveniences for the company. The government announced these changes in April, which include bans of fresh investments from China and other neighboring countries through the automatic route. The new policy mandates all investors in China to seek approval from the government to invest in Indian firms, which can possibly impact further funding round by top Chinese investors in startups.
Alibaba, an e-Commerce giant in China, is the biggest investor of the company. BigBasket raised a debt funding worth $50 million from Alibaba in April 2020.
BigBasket, Morgan Stanley, and Goldman Sachs declined to respond to requests for comments on the recent development.
Source credit: https://www.livemint.com/companies/start-ups/alibaba-backed-bigbasket-eyes-up-to-usd-200-million-in-new-fundraise-11590345499973.html