The startup will use the infuse capital to meet the working capital and capex requirements of the company, including setting up new warehouses, strengthening the cold chain, and setting up facilities for reprocessing of fruits and vegetables.
While, according to the sources, the funds will also be deployed for surging its supply chain for the recently launched milk subscription business BB Daily, and its specialty vending machine business BB Instant.
“We have a clearly identified use case for debt. We are present in 26 cities and continue to optimise our supply chain. A significant part of our business is fresh fruits and vegetables, the bulk of which is sourced directly from farms. It is crucial that we maintain the quality right up to the last mile. Funding such capex requirements is best done through debt,”Hari Menon, co-founder at BigBasket, said.
Bigbasket was started by Abhinay Choudhari, Hari Menon, Vipul Parekh, VS Ramesh, and VS Sudhakar in 2011. The company claims to be one of the largest online food and grocery players in India with operations spread across 26 cities. It offers an online assortment with 19,000 plus products and 3,000+ brands across fruits, vegetables, staples, meat, beverages, and personal care categories.
Nilesh Kothari, Co-Founder, Trifecta Capital, said, “Bigbasket is the largest online grocery brand in the country. The five founders have significant offline and online retail experience. They have leveraged economies of scale, technology, supply chain and logistics, backward integration and product mix to create a viable, high growth business that is delivering significant value to its customers.”
Bigbasket claims to have generated ₹3,200 crore in revenue in FY19, and aims to generate almost double that amount i.e ₹6,300 crore in 2019.
“But we have internally said that we will operationally break even in all 26 cities by the end of this year. We will have no cash burn and will need money only for new businesses, that is BB Instant and Daily. They will take another year to break even. But our normal standard business will not need money anymore,” Menon added.