Tata Digital Marks 4th Investment In BigBasket Worth $200 Mn

SUMMARY

The startup plans to use the funds to strengthen its infrastructure and marketing to expand the core grocery business and invest in BB Now

Tata Digital acquired a majority stake of around 64% stake in BigBasket in May 2021 and has since then invested more than $500 Mn in the company

BigBasket losses have widened by 4X in FY22, reaching INR 812.7 Cr on the back of INR 7,078.5 Cr operating revenue

Bengaluru-based BigBasket has reportedly raised another $200 Mn from Tata Digital and other investors, hitting a valuation of $3.2 Bn. The fresh infusion also follows BigBasket’s INR 1,000 Cr fundraise from its holding company. Counting the $200 Mn investment at the time of acquisition, the fresh capital infusion makes it the fourth time Tata Digital has invested in BigBasket.

In total, the Tata Sons subsidiary has invested more than $550 Mn in BigBasket in the past one and a half years.

The startup plans to use the funds to strengthen its infrastructure and marketing to expand the core grocery business.

BigBasket further looks to invest in its quick commerce vertical BB Now, an ET report quoted CEO Hari Menon.

The startup was last valued at $2.7 Bn when its parent company Innovative Retail Concepts raised INR 350 Cr from Supermarket Grocery Supplies – a Tata-owned company that acts as the holding company for the BigBasket operator.

Tata Digital owns Supermarket Grocery. Innovative Retail Concepts was made a subsidiary of the latter after Tata Digital acquired a majority stake of around 64% stake in BigBasket in May 2021.

The fundraise also follows BigBasket’s widening losses in FY22. According to its filing, BigBasket posted INR 812.7 Cr in losses – a 4X rise year on year, while its operating revenue only increased 17% YoY to INR 7,078.5 Cr in FY22.

The startup has been going all out with inventory purchases as well as advertising as it expands on the back of its quick commerce as well as B2B initiatives.

Advertising and promotional expenses of the startup saw a 15X rise in FY22, zooming to INR 186.5 Cr in FY22. Its transportation distribution expenses rose 42.7% to INR 454.4 Cr and the purchase of goods amounted to INR 5,807.3 Cr in FY22.

As the company plans to take on the $300 Bn worth of ecommerce opportunity in India, BigBasket also forayed into the offline retail segment and unveiled its first tech-driven self-service store Fresho in November 2021 in Bengaluru.

The startup also plans to open 100 physical outlets across India by 2023 and 800 stores by 2026, estimating gross sales of $2 Bn in 2023.