IFC to invest $25m in India's BigBasket
The International Finance Corporation (IFC), the investment arm of the World Bank, will commit $25 million to Indian online grocer BigBasket.
IFC will take a minority stake in SuperMarket Grocery Supplies, the owner of the BigBasket brand, according to a filing. SuperMarket Grocery licenses the brand to Innovative Retail Concepts, which handles operations at the company.
BigBasket will use the capital to expand into 20 additional tier two cities across India over the next two years; currently it operates in nine cities, all but one of which are tier one. It will also add more collection centers for farmers to deliver fresh produce; from the four currently operating, the company will grow to 15.
IFC's commitment is meant to encourage job growth, as BigBasket's employee count is expected to reach 5,000 by 2017, from its current level of 2,900. The firm also hopes to benefit farmers by providing them with more venues for selling their goods, and improve the availability of high-quality groceries in the country.
BigBasket is one of India's leading online grocery chains. It operates on an inventory-led model, sourcing products directly from farmers and delivering from central collection points. In addition to home delivery, the company has also recently launched a service to supply small neighborhood markets, called kiranas.
By offering more frequent deliveries - daily or weekly, as opposed to the monthly deliveries common among traditional distributors - BigBasket says it can help these small businesses operate with more efficiency and flexibility.
The company has also led other online grocery start-ups in terms of funding. IFC's investment brings BigBasket's total fundraise to more than $100 million, on top of a $50 million round earlier this year led by Bessemer Venture Partners, a INR2 billion ($32.8 million) Series B round led by Helion Venture Partners and Zodius Capital in 2014, and a $10 million Series A round from Ascent Capital in 2012.
BigBasket's closest rival in fundraising terms is Grofers, which delivers products from local shops rather than sourcing the supply itself. Grofers raised a $35 million Series B round from Tiger Global and Sequoia Capital in April, and a $10 million Series A round in February from the same investors.
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