The Abraaj Group leads $150mn round of fundraising for Indian e-grocer BigBasket


March 23, 2016 | By RetailME Bureau

The Abraaj Group, a private equity investing firm operating in the growth markets of Africa, Asia, Latin America, Middle East and Turkey, led a $150 million round of fundraising for BigBasket, one of India’s leading online grocery businesses.

The capital raise saw the entry of new investors such as the International Finance Corporation and Sands Capital and participation from existing investors such as Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital.

The funding, which Abraaj has led through one of its funds, marks the group’s third investment into the global e-commerce market, following its acquisition of stakes in Turkish online retailer Hepsiburada and Dubai-based mobile application taxi service Careem.

Abraaj has been present in India since 2006 and the partnership with BigBasket marks its third investment in India over the past five months, with previous transactions including Care Hospitals and the development of a gigawatt scale renewable energy platform in partnership with the Aditya Birla Group.

Founded in 2011, BigBasket is headquartered in Bengaluru serving customers across India, currently operating in eight metro cities and 10 Tier II cities. The company sells over 19,000 products across 1,000 brands, including fruits, vegetables, meat, beverages and personal care products. BigBasket.com averages five million monthly unique visitors and executes over one million orders per month. Its mobile application has been downloaded by more than a million users.

BigBasket is continuing to deliver strong growth, with a five-fold increase in monthly revenues over the last 18 months, supported by supply chain optimisation and an increased proportion of high margin private label products. Own brand products currently account for 33% of revenue and are projected to reach 40% by the end of this year.

The proceeds of this round of fundraising will be used to finance BigBasket’s growth through further penetration into existing markets, expansion into Tier II cities across India, scaling-up of its recently launched express delivery and specialty store business that caters to top-up and emergency purchases and increasing the product range offered to customers.

Commenting on the investment, Omar Lodhi, partner and head of Asia for The Abraaj Group, says, “We are excited about the investment opportunities in India, a key geography for us, where we continue to identify and partner with market leading companies. Abraaj will leverage its strong experience in the consumer sector to enable BigBasket to further enhance its strong domestic position.”

“The strength of BigBasket’s business, which amounts to a transformational experience for its target consumers is evident from the success of this fundraising. As India moves towards organised retailers that offer standardised quality, comfort and speed in the shopping experience, we look forward to guiding BigBasket in its next phase of development,” he adds.

“We have a unique opportunity to build one of the largest grocery businesses in the country, whether offline or online, and we expect the capital raised in this round to enable us to do just that. We intend to increase the reach of our just-launched one-hour express delivery service and also launch our marketplace for specialty stores in the coming months. This coupled with an expansion in our range of private label products will create a solid foundation for growth in both revenue and profitability. We are excited that Abraaj has chosen to lead this round and join the high quality investor set that we already have,” states BigBasket co-founder VS Sudhakar.

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