The investment aims to strengthen Alibaba’s position in India, where rival Amazon has made several investments.
BigBasket, which researcher Forrester estimates accounts for roughly 40% of India’s USD 750 million online grocery market, is competing with SoftBank-backed Grofers and Amazon’s India business.
Alibaba invested USD 146 million in the grocer, subscribing to compulsorily convertible preference shares, BigBasket said in a filing to Indian regulators. Investors also picked up stakes in the online grocer through secondary share purchases. Alibaba is now the biggest shareholder in BigBasket.
The online grocer, which sells a larger variety of products and produce, will use the funds to improve its technology, analytics, infrastructure and marketing.
The Bengaluru-headquartered firm, which also plans to build farmer networks and expand deeper into Indian cities where they operate, expects to break even between 2020 and 2022, a company representative added.
BigBasket is also partnering with Paytm E-Commerce that runs the Paytm Mall online marketplace. Under the deal, which will become effective in the first half of this year, Paytm will become the default payments provider to BigBasket while BigBasket will be able to cross-sell groceries on Paytm Mall.
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