Online Grocery delivery business BigBasket has raised $150 million fresh funding round led by UAE’s Abraaj Group. The capital raise saw the entry of new investors such as the International Finance Corporation and Sands Capital and participation from existing investors such as Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital.
The proceeds of this round of fundraising will be used to finance BigBasket’s growth through further penetration into existing markets, expansion into Tier II cities across India, scaling-up of its recently launched express delivery and specialty store business that caters to top-up and emergency purchases, and increasing the product range offered to customers.
Commenting on investment VS Sudhakar, Co-Founder of Big Basket, said, “We have a unique opportunity to build one of the largest grocery businesses in the country, whether offline or online, and we expect the capital raised in this round to enable us to do just that. We intend to increase the reach of our just-launched one-hour express delivery service and also launch our marketplace for specialty stores in the coming months. This coupled with an expansion in our range of private label products will create a solid foundation for growth in both revenue and profitability. We are excited that Abraaj has chosen to lead this round and join the high quality investor set that we already have.”
Omar Lodhi, Partner and Head of Asia for The Abraaj Group, said, “We are excited about the investment opportunities in India, a key geography for us, where we continue to identify and partner with market leading companies. Abraaj will leverage its strong experience in the consumer sector to enable BigBasket to further enhance its strong domestic position.”
“The strength of BigBasket’s business, which amounts to a transformational experience for its target consumers, is evident from the success of this fundraising. As India moves towards organized retailers that offer standardized quality, comfort and speed in the shopping experience, we look forward to guiding BigBasket in its next phase of development,” he added.
According to a recent research report from Goldman Sachs, Indian consumption is moving online at a rapid pace. The country has the third largest internet user base in the world but an extremely low rate of internet penetration. However, by 2020, the number of people online is estimated to be over 670 million and this could hit one billion by 2030. The e-commerce sector in India has grown rapidly in recent years and the report estimates it will reach $300 billion by 2030. India’s current low smartphone penetration rate in the mobile phone market is also expected to change as smartphones become cheaper to purchase, rising from 16 per cent to 54 per cent by 2020.