INDIA’S largest online grocery store Bigbasket could be close to raising US$200 million from Chinese e-commerce giant Alibaba Group Holding and its Indian associate, Paytm E-commerce.
That sum would see the company surrender 20 percent of its equity, but it’s not yet clear whether the two firms will invest as a team of separately, a person with direct knowledge of the negotiations told Bloomberg.
The pair are in a 60-day exclusive pact with Bigbasket while they conduct due diligence, the source said, but there are other investors also speaking to the retail firm including Alibaba’s US rival Amazon
According an earlier report in the Economic Times, Amazon was looking to acquire Bigbasket but the talks appeared to stall over disagreements over valuations. The US firm recently made its own move into the grocery space with the acquisition of Whole Foods and has received permission from the Indian government to invest US$500 million into food retailing in the country.
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An Amazon spokesman told Bloomberg, “We have received the government approval for food retail based on our application for the same. We are excited by the government’s continued efforts to encourage FDI in India for a stronger food supply chain”.
But Alibaba also seems determined to cement its place in food retail, investing US$305 million in Chinese supermarket chain, Sanjiang Shopping Club. Southeast Asian e-commerce platform Lazada, which is backed by Alibaba, also acquired Singapore-based online grocer RedMart.
The Alibaba-Paytm Mall deal would value BigBasket at nearly US$900 million, sources told the Economic Times, which is double its estimated worth when it raised funds last March an in line with the valuation it was seeking.