Exclusive: PremjiInvest may lead $50M fresh investment in grocery e-tailer BigBasket

PremjiInvest, the private investment arm of Wipro Ltd chairman Azim Premji, is in discussions to lead a $50 million (Rs 312 crore) Series C investment round in Bangalore-based SuperMarket Grocery Supplies, which owns and operates online groceries marketplace â€“ BigBasket.com, sources told Techcircle.in.

According to senior investment bankers who are aware of the discussions, this fresh round of funding is expected to be wrapped within three months.

Request for views on the development from the management of BigBasket and PremjiInvest did not elicit any response.

This comes within seven months of BigBasket raising Rs 200 crore ($32.9 million) in its Series B round of funding from a clutch of investors including Helion Venture Partners and Mumbai-based Zodius Capital.

The round also saw participations from its existing investors, including Ascent Capital; Srihari Kumar, founding partner of Singapore-based hedge fund LionRock Capital and former partner at TPG-Axon; and serial entrepreneur K Ganesh.

After establishing its presence in its home market Bangalore, it has expanded into Mumbai, Pune, Hyderabad and Chennai. It is expected to enter Delhi soon.

The firm still has cash from the last round but would need a larger stash not just to enter new markets but to create a war-chest to fight fresh competitors, including some which follow an asset-light hyper-local grocery delivery marketplace.

In the grocery e-commerce space ZopNow raised $10 million from Dragoneer Investment Group with participation from the existing investors Accel Partners, Qualcomm Ventures and Times Internet. ZopNow, which earlier competed head on with BigBasket, has pivoted to become an asset-light business and partners with offline hypermarket chain HyperCity to pick products and deliver to consumers who order online.

Then there are a bunch of delivery startups which essentially connects users to local grocers. Grofers raised $45 million across two rounds since January this year; PepperTap raised $10 million while LocalBanya also got fresh funding.

BigBasket is understood to have closed FY15 with a top-line of Rs 250 crore, with a run-rate of 6,000 orders a day with average billing of Rs 1,500 per customer.

It had generated sales of around Rs 70 crore in the year ended March 31, 2014, according to VCCEdge, the data research platform of VCCircle.

For PremjiInvest, if it manages to wrap up the funding in BigBasket, the deal will come as another bet in the booming e-commerce sector in India.

It has investments in horizontal e-commerce marketplace Snapdeal and had earlier backed lifestyle e-commerce venture Myntra, which was later acquired by Flipkart.

PremjiInvest has been actively investing in the internet and new generation tech space in both India and abroad. Most recently it backed Policybazaar in the country.

Last month, it led a $80 million funding round in Silicon Valley-based Cyanogen Inc, a mobile operating system (OS) developer which customises Google's Android OS for its clients.

In February, it joined others in a $115 million investment round in California-based Zuora Inc, which runs a software-as-a-service (SaaS)-based subscription billing and financial solutions venture. Last year, it invested in another US-based software firm Datastax Inc.

Indeed, PremjiInvest was also reportedly in talks to invest in BigBasket last year itself. However, the deal was finally inked with other investors.

The firm, which burnt its fingers in the retail sector with an investment in Subhiksha, a firm which went bust, has built a significant exposure to the offline retailing sector too.

It invested in Future Lifestyle Fashions Ltd last year and also counts Tata's retail arm Trent Ltd as a portfolio firm.

(Edited by Joby Puthuparampil Johnson)