E-grocer BigBasket is learnt to have picked up $50 million from its existing investor Alibaba as part of a bridge round, two people in the know said, at a time when the online grocery market is seeing unprecedented demand during a nationwide lockdown due the Covid-19 crisis.
A bridge round is an intermediate funding meant to cover short-term expenses as the company looks for a larger investment cheque.
While the commitment from Alibaba came through pre the Covid-19 virus outbreak, the latest infusion comes at a time when BigBasket needs capital to up its capacity and build infrastructure to cope with a demand spike. A mail sent by ET on the fundraise to Hari Menon, cofounder & CEO, BigBasket remained unanswered.
Last year, BigBasket had raised $150 million led by Mirae Asset-Naver Asia Growth Fund, UK government-owned CDC Group, and existing backers like Alibaba, at a valuation of $1.2 billion.
The new money is expected to have been pumped in at the same valuation. News portal Entrackr first reported on the bridge round on Wednesday.
The last few weeks have been tough going for players like BigBasket with more consumers wanting to place online orders but unable to find slots.
BigBasket is currently operating at around half its daily capacity as it continues to struggle with manpower shortages due to the lockdown. Last week the company announced that it would hire 10,000 additional permanent workers to cater to the excessive demand, which is as much as five times that on a normal business day.
Menon, CEO of BigBasket, had told ET recently, that the company already has infrastructure in place to cater to 300,000 orders a day from its normal of 150,000 orders prior to the lockdown. He expects demand for groceries to be delivered to customer doorsteps to remain even after the lockdown as people will choose to remain cautious about leaving their homes.
The company’s rival SoftBank-backed Grofers is also struggling to cater to increased demand due to the lockdown and said it would hire 2,000 workers and add more local partners to stock and deliver goods on its behalf.
Leave a Reply