ICICI Venture, Zodius Capital eye stake in BigBasket

BANGALORE/MUMBAI: Online grocer BigBasket is in talks with private equity investors ICICI Venture and Zodius Capital, among others, to raise about $33 million in funding, sources directly aware of the matter said. BigBasket, with operations in Bangalore, Mumbai and Hyderabad, is looking to draw up a $100-million valuation, while it hopes to report merchandise shipments worth Rs 200 crore or $33 million, in the current fiscal.
IT major Wipro's boss Azim Premji's investment arm PremjiInvest and Silicon Valley venture fund Sequoia Capital are among the other investors who looked at the deal. US-based Sequoia went out of the race after placing a lower offer.

The deal-making could get delayed, tracking potential regulatory changes allowing foreign direct investment (FDI) in e-commerce. Easing up the FDI rules will comfort foreign investors who have employed indirect routes to fund several cash guzzling e-tailing engines in the country. "It (BigBasket) has received three bids, while a fourth one is still under consideration."

The serial investor duo K Ganesh and Meena Ganesh are co-promoters of BigBasket, while Ascent Capital, which had pumped in $10 million two years ago, is a significant minority investor. K Ganesh did not respond to repeated calls and text messages.

Zodius Capital, co-founded by former WNS chief executive Neeraj Bhargav, declined to comment.

ICICI Venture officials didn't respond to calls and messages, while PremjiInvest could not be reached after office hours for immediate comments.

BigBasket has emerged as the country's largest online food and grocery store, retailing over 10,000 products of over a 1,000 brands. These include fresh fruits and vegetables, rice, pulses, spices, beverages, personal care products and meats.

BigBasket promoters Hari Menon, along with four others, sold their offline retail brands Fabmall and Trinetra to Aditya Birla Group, to tap the online market largely driven by working women shoppers who are pressed for time.

BigBasket is approaching a cash breakeven on its home turf Bangalore, where it first launched operations. Analysts point out that the primary target consumer for e-grocers are people who shop from their local kirana stores, by giving them the same luxury of home-delivery. Though restricted to just a handful of metros, the online grocery market is said to be clocking a growth rate of close to 30% annually.