China’s Alibaba became the biggest shareholder in India’s leading online grocer BigBasket after a $300-million funding round, stepping up its rivalry with Amazon in the country. Alibaba invested $146 million in the grocer, subscribing to compulsorily convertible preference shares, BigBasket said in a filing to Indian regulators.
Hari Menon, chief executive officer said that investors picked up stakes in BigBasket through secondary share purchases as well but declined to give a breakdown of the same. But they confirmed that Alibaba now owns the biggest slice. BigBasket, which sells everything from vegetables to shampoo, will use the funds to improve its technology, analytics, infrastructure and marketing, Menon said.
Sands Capital, International Finance Corp and Abraaj Capital also participated in the $300 million funding round.
The Indian company is planning to sign a deal with Paytm e-commerce that runs online marketplace, Paytm Mall, allowing both firms to leverage each others strengths.
Under the deal, which will become effective in the first half of this year, Paytm is expected to become the default payments provider to BigBasket while it will be able to cross-sell groceries on Paytm Mall.
BigBasket, which researcher Forrester estimates accounts for roughly 40 percent of India’s $750 million online grocery market, is competing with SoftBank-backed Grofers and Amazon’s India business.
