Bangalore-based online grocery store BigBasket, has raised $150 million in a round of funding led by Abraaj Group with participation from International Finance Corporation and Sands Capital among others, reports the Mint. Existing investors including Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital also participated in the round.
The company will use the fresh round of funding to expand its one-hour express delivery service and launch a marketplace for speciality stores. The company, which currently operates in 18 cities, currently claims to deliver one million orders every month.
Prior funding: BigBasket had raised $50 million in a round of funding from Bessemer in August last year. At the time, the startup appointed Citigroup to help raise an additional $150 million from a new set of investors. The company said then that it would use the funding to expand to 50 tier 2 cities. In September 2014, BigBasket raised Rs 200 crore investment. Prior to that, BigBasket had raised $10 million from Ascent Capital in March 2012. GrowthStory’s Meena and K Ganesh had also invested in this venture.
Downturn in the grocery segment: The online grocery delivery segment, after garnering all the attention at the start of last year, has slowly been faltering with multiple companies pulling out entirely, or slowing down operations. Recently, Ola shut down its food and grocery delivery businesses Ola Cafe and Ola Store, while Flipkart shut down its grocery delivery service Nearby, five months after its launch. Similarly, hyper-local grocery delivery service PepperTap shut down operations in six cities: Mumbai, Kolkata, Chennai, Ahmedabad, Chandigarh, and Jaipur, as well as laid off 400 personnel. Grofers shut down its services in 9 cities citing low acceptance, while LocalBanya’s website has been down for over 6 months now.
Delyver acquisition: In June last year, BigBasket acquired the hyper local delivery startup Delyver in a cash and stock deal for an undisclosed amount. The company had said then that the acquisition would add to its delivery service depth, enabling it to expand its reach in Bangalore, where Delyver is based out of as well.
Grocery store tie up for private label products: In June, BigBasket announced that it was tying up with around 1,800 grocery stores to sell its private label products at their offline stores. This would include grocery products from brands like Royal, Popular and Fresho. The company mentioned that it would soon also launch another private label, a coffee brand, and eventually venture into flavored tea and cookies. Interestingly, the company had said then that its private labels account for around 35% of its revenues.
– Last month Amazon launched a grocery delivery service app in Bangalore.
– In September 2015, Delhi-based AUTOnCAB, a cab and auto booking service, acquired the Gurgaon-based online grocery delivery startup BigZop in a stock and cash deal.