BigBasket Secures $6.9 Mn Venture Debt From Trifecta Capital

Bengaluru-based online grocer BigBasket has raised about $6.9 Mn (INR 45 Cr) venture debt from Trifecta Capital.

The funds will be used to meet the capex requirements of the company including setting up new warehouses, strengthening cold chain, and setting up reprocessing facilities for fruits & vegetables.

Started by Fabmall founders VS Sudhakar, Hari Menon, Vipul Parekh, VS Ramesh and Abhinay Choudhari in 2011, BigBasket is an online food and grocery store.

Commenting on the funding, Vipul Parekh, CFO and co-founder of Big Basket said, “Whilst we have access to equity capital, we are looking to optimise our capital structure. Venture debt is cheaper than equity, especially on a post-tax basis and will help reduce our overall cost of capital. Also, it comes without any end use restrictions. We chose Trifecta Capital for our debt needs because of their knowledge of the startup ecosystem, speed, and flexibility and  to leverage Trifecta Capital’s deep network of relationships to build a sustainable and profitable business.”

Trifecta Capital provides venture debt to new age businesses across different stages of their development. It was founded by Rahul Khanna and Nilesh Kothari. In the 18 months since commencement, the fund has supported 18 companies like PaperBoat, Rivigo, Nephroplus, Urban Ladder, Industrybuying, OneAssist, UrbanClap, and IdeaForge etc.

Talking about the Trifecta fund Rahul Khanna, co-founder of Trifecta Capital said, “Trifecta’s strategy is to provide customised debt solutions to companies based on their specific business needs. We are also able to connect our investee companies to traditional businesses and banking channels.  Equally, our LPs (Limited Partners) are eager to find ways to collaborate with our investee companies.”

BigBasket’s online grocery stores are present in more than 25 cities including in Bengaluru, Hyderabad, Mumbai, Pune, Chennai, Delhi, etc. According to a company statement, the online grocery store stocks over 18,000 products and 1,000 brands including fresh fruits and vegetables, packaged bread, bakery and dairy products, etc.

As per founder Hari Menon, a significant part of BigBasket’s business is fresh fruits and vegetables – the bulk of which is sourced directly from farms, which makes it crucial to maintain the quality right upto the last mile. He revealed that the company is in “the last leg of a pilot which will ensure that all fruits and vegetables are maintained at a constant temperature and, thereby, improve shelf life of the produce by almost 10 days. This will be done using large scale equipment such as pre-coolers and ventilators.”

According to a Goldman Sachs report, “The domestic online retail industry is evolving into a hyperlocal, on-demand market. India’s ecommerce market is estimated to grow 15 times to $300 Bn by 2030.” Big Basket competes with Grofers, LocalBanya, ZopNow, etc.