BigBasket's latest financing is likely to come from Tata
Digital and existing shareholders. While the size of the round hasn’t been
finalised, it’s likely to be in the range of $200 million or more, the people
said.
Bengaluru-based BigBasket's holding company Supermarket
Grocery, of which Tata owns 62%, filed documents with the Registrar of
Companies (RoC) recently about plans to increase the authorised share capital
of the firm, typically an indication of a fresh cash infusion on the cards.
BigBasket was valued at $2.7 billion in a secondary
transaction where Brand Capital — the strategic investment arm of the Times
Group, which also publishes this paper — offloaded part of its stake in the
firm. BigBasket’s last primary transaction valuation was $2 billion in May last
year, soon after Tata Digital’s majority acquisition of the company.
Company growing at 40% annually
“After 1mg (which got $41 million in funding), BigBasket is
also working on a new cash infusion. It will happen at a pre-money valuation of
around $3.2-3.3 billion,” said one of the people mentioned above. Epharmacy 1mg
turned a unicorn earlier this month, ET reported.
For BigBasket, the estimated bump up in valuation will be
around 75% compared with the last primary cash infusion in the company.
Tata Digital and BigBasket CEO Hari Menon didn’t respond to
queries.
The infusion comes as BigBasket has been expanding core
offerings steadily while venturing into quick commerce against rivals such as
Swiggy’s Instamart, Reliance Retail-backed Dunzo, Zepto and others. Menon has
previously told ET that despite newer models, the bulk of grocery sales will
come from its scheduled delivery channel, for which it has been reducing
delivery times in key cities.
“The company continues to grow 40% annually as projected
earlier internally. This financial year ending March 2023, the company is
expected to generate sales of $1.5 billion (net of discounts),” said one of the
people cited above. ET had reported that it became the second vertical
ecommerce player to have crossed gross sales of $1 billion in FY21.
It has also been expanding its offline presence through
Fresho stores as well as assisted shopping units in non-metro markets, ET has
reported.
Management lock-in, IPO plans
Supermarket Grocery’s recent filings, sourced through
business intelligence firm Tofler, showed the management of BigBasket have a
share lock-in until September 30, 2023.
Until then, they can sell up to 10% of their holdings
without clearance from Tata Digital but will need its approval beyond that.
Sources said that there are no secondary share sales happening in the latest
funding round. Tata Digital will have the right of first refusal on any such
share sale, the documents showed.
According to the people mentioned above, BigBasket’s
long-term plans for an initial public offering (IPO) remain in place, within a
period of two years. BigBasket’s management had said at the time of the Tata
deal that it would eventually explore a public offering, without giving any
timeline.
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