Alibaba may join Paytm Mall in bid for Big Basket stake: report
19 July 2017
Chinese ecommerce giant Alibaba has joined Paytm Mall, in which it is an investor, in talks to pick up a stake in BigBasket, according an Economic Times report citing a person familiar with the developments.
Separately, BigBasket, India's largest online grocer is holding fundraising talks with Singapore's sovereign wealth fund Temasek Holdings and China's Fosun Group as well, another person said, according to the report.
The Alibaba-Paytm Mall combine has begun due diligence and has offered to invest $200 million in BigBasket at a valuation of nearly $900 million post the investment, these people said, declining to be identified. That's in line with what the grocery delivery firm was seeking and double what it was estimated to be worth when it raised capital in March last year, the report adds.
It is unclear yet if Temasek will join the ongoing funding round with Alibaba and Paytm Mall or wants to invest directly in BigBasket later.
Fosun's venture capital arm Kinzon Capital, on the other hand, is in discussions with BigBasket for co-investment in the ongoing funding round with an offer $20-30 million. "It is for the founders to decide who they would like to go with," one of the people mentioned above said.
None of the parties was prepared to comment on what Alibaba called "market speculation."
In an interview last week, Paytm founder Vijay Shekhar Sharma said that investment in an e-grocer was in line with the company's online-to-offline strategy.
Paytm Mall, which was spun out from parent One97 Communications this year to an entity called Paytm Ecommerce, received an infusion of $200 million in March from Alibaba and SAIF Partners.
Alibaba, which along with its payments affiliate Alipay owns a more than 50 per cent stake in Paytm Mall, has been increasing grocery and physical retail investments globally.
In November, Lazada, an Alibaba backed ecommerce platform in Southeast Asia, acquired Singapore-based online grocer RedMart. Alibaba is also investing $305 million in offline discount supermarket chain Sanjiang Shopping Club in China.
BigBasket, which was valued at $450 million during its previous fundraising led by Dubai-based Abraaj Group, was in discussions with Amazon for an investment but the talks reached a stalemate over various issues, including valuation. The two parties have held talks multiple times and could revive discussions.
BigBasket had also explored a merger with SoftBank-backed Grofers alongside holding fundraising discussions with financial investors.
Investment bank Morgan Stanley is advising BigBasket in its talks, the ET report says.