Grocery E-tailer BigBasket.com Raises $10M From Ascent Capital
Bangalore-based private equity firm Ascent Capital has invested $10 million in the first round of funding in BigBasket.com, an online grocery store. The transaction is believed to be the first institutional investment in an online grocery retailer and the largest series A round in an e-tailing firm in India.
For Ascent Capital, which manages $600 million across three funds, this is the first reported investment in a technology company after five years. In early 2007, it backed IT/ITeS firms like Zylog Systems, SemanticSpace and Spanco. Of late, Ascent has been investing in infrastructure plays like GMR Energy, IVRCL Assets & Holdings and Karaikal Port.
BigBasket.com has been founded by VS Sudhakar, Hari Menon, Vipul Parekh, VS Ramesh and Abhinay Choudhari. The team has both offline and onlineretail experience as they had set up India's first e-commerce site FabMart.com in 1999, and then established the Fabmall-Trinethra chain of more than 200 grocery supermarket stores in southern India. Trinethra was sold to Aditya Birla Group in 2006 and currently operates under the brand name 'More'.
Serial entrepreneur couple K. Ganesh and Meena Ganesh, who sold TutorVista to Pearson last year, have also invested in this venture.
Raj Kondur, director of Ascent Capital, has joined the board of BigBasket. Kondur had also backed the same team in 1999 as part of ChrysCapital'sinvestment in Fabmall.
According to BigBasket, the company's orders have doubled every month since its launch. The latest round of funding will be used to increase capacity,service and merchandise selection. BigBasket claims to carry twice the SKUs found in a typical grocery store and offers convenient payment modes like COD (cash on delivery). The firm also offers online and phone-based ordering options.
Currently present only in Bangalore, BigBasket plans to expand to five cities by the end of this year.
"Grocery is one of the largest categories in retail but also one of the most challenging ones. It requires very strong multi-disciplinary skills to make it work. Moreover, significant experience in the grocery business is a must, complemented by experience in e-commerce, and in setting up and running a very large and complex supply chain organisation. Our team has experience in all these areas" said Hari Menon, co-founder and CEO of BigBasket.
"We are delighted to work with the BigBasket team to establish a leading position in the grocery retail business in India, which is a $160 billion opportunity. As an early mover with significant traction and an experienced founding team, BigBasket has the potential to be the leader in this space. The success ofOcado and Tesco.com in the UK, Yihaodian in China and FreshDirect in the USA indicates that there is an untapped opportunity," said Kondur.