There’s more money flowing into India’s e-commerce space after BigBasket, a Bangalore-based company that sells and delivers groceries online, landed a $150 million investment led by The Abraaj Group in the UAE.
The Series D round also includes participation from new backers International Finance Corporation and Sands Capital, as well as existing investors Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital. BigBasket’s last funding activity came in August 2015 when it landed $50 million.
The company plans to spend this new capital expanding its services into new cities. Right now, BigBasket, which was founded in 2011 and uses its own warehouses unlike rivals, said it is present in eight metros and 10 tier-two cities in India, serving five million visitors and one million orders each month. The company claims to offer over 19,000 products from more than 1,000 brands. Beyond household names, it also stocks its own brand products which it said account for one-third of revenue — that’s projected to jump to 40 percent.
This raise will also go towards building out the company’s express delivery and speciality services, launched last year, and, more generally, expanding its catalogue of products and brands.
BigBasket’s latest fundraising comes amid uncertain times for Indian tech startups, and particularly those in the local services space, as many high profile investors are exercising greater caution with their check writing.
One of the more established players in India’s online grocery space, BigBasket faces competition from a number of newer arrivals such as ZopNow, PepperTap, and Grofers. The latter two raised significant money from investors last year, but both have fine-tuned aggressive expansion plans this year.
Grofers pulled out of nine cities in India in January, while PepperTap shuttered operations in six cities. In both cases, the moves were made in the best interests of business, as both companies found the unit economics of less developed cities particularly challenging. Despite that scaling back, BigBasket is taking that challenge on directly now leveraging its experience working with suppliers, merchants and customers in an offline setting.