Online grocery major Bigbasket is said to be on the lookout to raise another round of funding of $150 million sometime after March next year. Sources indicate that this might be the last round of fund-raising before the company considers an IPO (Initial Public Offer). It must be noted here that the online major raised $150 million in the current fiscal year.
Sources cited in the same report stated, on conditions of anonymity,”Bigbasket currently has cash to sustain for the next 18 months. The formal fund raising process will begin post March but talks are currently underway to finalize the exact quantum of funds, which in all likelihood is going to be $150 million and will possibly be the last round before an IPO.”
Bigbasket has survived the global funding slowdown by keeping its business simple; however, Amazon is a looming threat and staff retention a serious challenge. Despite such adverse conditions, the company raised $150 million in March amid a funding slowdown even as rivals PepperTap and Localbanya shut down. Simplicity, speed, convenience and, of course, attractive prices are driving e-commerce in India, and Bigbasket is no exception.
Hari Menon, Chief Executive Officer of Bigbasket, confirmed that the next fund raising will happen after March but declined to say how much the company was planning to raise. “It’s still very early to talk about it and we have not decided on any funding figure yet but we do plan to start the fund raising process after March 2017,” Nair said.“Also, I am not in a position to say whether we will go for an IPO or not after the next round,” he added.
Bigbasket, which is supposed to have broken even in Bengaluru, will use the cash from its next round to develop its private label brands, the two people cited above said. “The share of private labels in the company’s revenue has been growing steadily and has significantly added to its margins,” the second person said, also requesting anonymity. Private labels contributed Rs. 750 crores to BigBasket’s sales in the last financial year, according to this report.
Bigbasket operates 25 warehouses and 63 dark stores (storage facilities). The company claims to have 3 million repeat customers and is targeting revenue of Rs 1,800 crore in fiscal year 2017.
In March, Bigbasket raised funds from new investors including private equity firm Abraaj Group, venture capital firm Sands Capital Management LLC and International Finance Corp., the private sector lending arm of the World Bank. Existing investors Helion Ventures Partners Llc, Bessemer Venture Partners LP and Ascent Capital LLC also participated in the round. The company has raised close to $296 million till date.
Bigbasket’s proposed fund raising comes at a time when investors have turned cautious about investing in start-ups. Start-ups in India have raised just $2.95 billion in the first half of 2016, lower than the $3.52 billion investors put in start-ups in the year-ago period, according to news and opinion siteTrak.in.