BigBasket’s B2B Arm Raises Debt Funding From Trifecta Capital

Bengaluru-headquartered grocery company BigBasket has been raising rounds of debt funding from Trifecta Capital and was even planning to issue warrants to BCCL.

According to the Ministry of Corporate Affairs filings of Supermarket Grocery Supplies, B2B arm of BigBasket, accessed by Inc42, the company has received INR 25 Cr worth debt funding from Trifecta Capital on February 11, 2020. The company has issued 250 Series C debentures worth INR 10 Lakh each to Trifecta.

With this, the company has also issued 3125 Series F preference shares worth INR 2.5 Cr, with a nominal value of INR 20 with a premium of INR 7980. Of this, the company will be calling for INR 2.49 Cr as required.

Prior to this in October 2019, Trifecta Capital invested INR 25 Cr debt funding in BigBasket picking up 250 Series B debentures. This debt may be a part of the INR 100 Cr debt BigBasket had announced in July 2019, however, there is no clarification on the same.

Also in September 2019, BigBasket said it has entered into a Warrant Subscription Agreement with Bennett Coleman & Co Ltd and has been approached to offer and allot 10 warrants worth INR 97.5 Lakh each leading to INR 9.75 Cr worth warrants. However, there has been no confirmation on this in the filings yet, as BCCL had a time of 18 months to accept such offer.

Founded in 2011 by VS Sudhakar, Hari Menon, Vipul Parekh, VS Ramesh and Abhinay Choudhari, BigBasket began as a grocery delivery startup. It has now expanded into a catalogue of household essentials and cosmetics, among other items of daily use.

Backed by Helion Venture Partners, Bessemer Venture Partners, and Alibaba Group, BigBasket turned unicorn in May 2019 when it closed its Series F round. This took its total funding raised to over $1.02 Bn.

The company currently operates in 26 Indian cities and claims to process over 1.40 lakh orders per day. The company also claims to have over one crore of users on board.

In November 2019, BigBasket announced that it is close to the breakeven point in 10 Tier 1 cities. These cities include Bengaluru, Chennai, Hyderabad, Mumbai, Pune and Delhi NCR, where BigBasket is also planning its electrification drive.

In the last financial year that ended in March 2019, BigBasket’s B2C arm recorded over INR 3,250 Cr in sales, noting a 60% jump from FY2018. In the FY20, the company is targeting INR 5,300 Cr in revenue.

Uncertainty of when the company will attain profitability and positive operating cash flows have led BigBasket to question how long this might be sustainable. However, the management hopes that it will be able to generate sufficient cash flows to meet its obligations based on the growth recorded during the year.

The company filings showed that it aims to turn profitable in FY22 with INR 158.78 Cr but it continues to expect a loss in FY20 and FY21.

According to a Goldman Sachs report, the Indian online grocery market is estimated to reach $40 Mn (INR 270 Cr) by FY19, growing at a CAGR of 62% from 2016 to 2022.

Morgan Stanley expects the online food and grocery segment to become the fastest-growing segment in India, expanding at a CAGR of 141% by 2020 and contributing $15 Bn or 12.5% of overall online retail sales.