Alibaba, the China-based e-commerce giant, is reportedly all set to invest a massive amount of around ₹1,937 crore ($300 million) in online grocery startup BigBasket.
The development was first reported by Economic Times, citing people directly aware of this transaction. This will be a step forward for Alibaba which seems to be taking on a fight with Amazon in the Indian e-commerce sector.
According to the report, the deal has been in the works since last six months. Further, this transaction will also boost the company’s valuation to around $850 million. The report further mentions that the transaction is expected to involve a primary investment of about $220 million while $80 million will be used to acquire shares from existing investors.
Depending on the final investment structure, Paytm, could also invest in the $300 million funding round. It’s noteworthy that Alibaba holds a significant stake in Paytm.
While it is not yet confirmed which venture capital firms are looking to take a partial exit, but it seems that these firms could be in the list — GrowthStory, Ascent Capital, Zodius Capital and Helion Venture Partners. Along with them, BigBasket co-founders Hari Menon, Vipul Parekh, Abhinay Chaudhary and VS Sudhakar are also likely to sell a portion of their holding in the company.
Earlier this year, in October, BigBasket raised around ₹32.65 crore in a new funding round from Helion Venture Partners. Previously, there were reports making rounds related to the BigBasket’s merger with its rival Grofers, but the reports turned out to be false.
It will be interesting to see India’s online grocery sector with the backing of giant-like Alibaba to the existing players who are dominating the market and the new-entrants such as Amazon India and Flipkart.