Bengaluru-based online grocery store, BigBasket.com has raised $50 million in a new round of funding led by Bessemer Venture Partners at $400 million valuation to expand into 50 more Tier-II cities. The startup has also mandated Citigroup to raise $150 million from a set of new investors, as per people familiar with the matter. The firm has raised about $57 million from investors including Ascent Capital, Helion Ventures and Zodius Capital.
Started in 2011 by Hari Menon, VS Sudhakar, Vipul Parekh and Abhinay Choudhari, BigBasket has its presence in 8 cities with operations being rolled out in Kolkata and Ahmedabad currently. It expanded into Mumbai, Hyderabad, Pune, and Chennai recently. The company handles more than 6,000 orders a day and is looking to set up around 10 warehouses in each metro city in its network and one each in 50 towns to ship orders quickly.
Its private labels like HappyChef and others bring in about 33% revenue at the moment, which is expected to reach 40% by end of this year. “BigBasket would exit the current financial year with a revenue run rate of $400 million, a four-fold jump from the $100 million in August. Our revenue run rate projection for the next financial year, FY17, is $1 billion,” said Hari Menon, CEO, BigBasket.
The online grocery market is gaining the investors’ interest from the last few months with players like LocalBanya, PepperTap, Grofers and ZopNow. As per Goldman Sachs report, “the domestic online retail industry is evolving into a hyperlocal, on-demand market. India’s e-commerce market is estimated to grow 15 times to $300 billion by 2030.”
Its competitor in the niche grocery eCommerce space, ZopNow secured $10 million to expand to more cities in India, and PepperTap raised a $10 million series A funding from Sequoia Capital and SAIF Partners. Grofers too added additional $35 million to its coffers from Tiger and Sequoia in Series B funding. With this new funding, BigBasket can grow and expand helping it to compete with other players in the field.