Indian online grocer, Big Basket, has closed on a $150 million Series D led by Dubai-based Abraaj Group. The round, which surpassed Big Basket’s target of $120 million and which was executed through a series of tranches in recent months, included new investors, International Finance Corporation and Sands Capital, as well as existing investors, Zodius Capital, Helion Advisors, Bessemer Venture Partners, and Ascent Capital.
Abraaj has been active in India since 2006 and this investment marks its third investment in the country within the past five months.
“We are excited about the investment opportunities in India, a key geography for us, where we continue to identify and partner with market leading companies,” said Omar Lodhi, Partner and Head of Asia for The Abraaj Group in acompany statement. “Abraaj will leverage its strong experience in the consumer sector to enable BigBasket to further enhance its strong domestic position.”
Founded in 2011 and headquartered in Bangalore, online grocer, Big Basket sells more than 19,000 products including vegetables, fruit, meat, beverages, and personal care products spanning 1,000 brands throughout eight metro cities and ten Tier II cities across India. With five million visitors and more than one million executed orders per month, the company has experienced a five-fold increase in monthly revenue over the past 18 months.
This significant round of fundraising occurs at a time of increasing caution within the venture capital space, as investors are pressuring startups to focus on efficiencies and cost cutting after years of building customer bases and spending in order to gain market share. Live Mint reports that in 2015 there were fifteen funding rounds of more than $100 million in India according to the start-up tracker, Tracxn, while there have been a total of three (including Big Basket) so far in 2016.
However, Abraaj notes that India’s mode of consumption is rapidly shifting to online sources according to a recent report by Goldman Sachs. The country claims the third largest base of internet users in the world, but a very low level of internet penetration, leaving much room for growth. By 2020 India is expected to see 670 million people online, and by 2030 this number is expected to reach one billion, with the country’s e-commerce sector reaching a value of US$300 billion by the same time.
Riding this wave of potential, Big Basket plans to use the funds raised in this round to support greater penetration in existing markets and expansion into new cities, to expand its portfolio of products and brands, and to strengthen its express delivery and specialty services which cater to emergency orders.
“We intend to increase the reach of our just-launched one-hour express delivery service and also launch our marketplace for specialty stores in the coming months,” said VS Sudhakar, co-founder of Big Basket. “This coupled with an expansion in our range of private label products will create a solid foundation for growth in both revenue and profitability. We are excited that Abraaj has chosen to lead this round and join the high quality investor set that we already have.”