Online grocer BigBasket on Monday said it has received debt funding worth ₹100 crore from venture debt provider Trifecta Capital.
The money will go into working capital and capital expenditure requirements, said SuperMarket Grocery Supplies Pvt. Ltd, which owns and operates BigBasket.
This will include setting up new warehouses, strengthening the cold chain, building facilities for reprocessing fruits and vegetables and scaling up its supply chain for the recently launched milk subscription business BB Daily and its speciality vending machine business BB Instant.
The deal announcement comes two months after BigBasket raised $150 million in a financing round led by South Korea’s Mirae Asset-Naver Asia Growth Fund, UK’s CDC Group, and existing investor Alibaba. The company was valued just over $1 billion at that time.
“We had taken venture debt from Trifecta Capital in 2017 and realised that it was a more optimal form of financing for working capital and capex. Venture debt not only reduces dilution for all shareholders, but it also reduces the cost of capital, improves RoE and expands the runway. We recently raised $150 million from marquee investors and decided to supplement the equity capital with additional Venture Debt", Vipul Parekh, CFO, SuperMarket Grocery Supplies Pvt. Ltd said in a statement.
According to multiple investment analysts that Mint spoke to, the latest investment into Bigbasket is one of the largest debt deals in India’s consumer Internet industry this year.
It is not clear if the current round includes an equity option. Mails sent to BigBasket’s chief executive Hari Menon, and Trifecta founder Nilesh Kothari remained unanswered till press time.
Last year, Hero MotoCorp had invested convertible debt of $19 million into Ather Energy which was converted into equity in May when Ather secured $51 million in fresh funding from Sachin Bansal.
The BigBasket investment also comes at a time when India’s startup segment has witnessed renewed interest from debt investors including Temasek-owned InnoVen Capital and Alteria Capital.
Together, they have done follow-on rounds in more than 10 companies this year alone including in Bounce, VOGO, Toppr, Zestmoney, Xpressbees Logistics, Agrostar and BoAt.
“We have a clearly identified use case for debt. We are present in 26 cities and continue to optimise our supply chain. A significant part of our business is fresh fruits and vegetables, the bulk of which is sourced directly from farms. It is crucial that we maintain the quality right up to the last mile. Funding such capex requirements is best done through debt," said Menon, Co-Founder, SuperMarket Grocery Supplies Pvt. Ltd in a statement.
Bigbasket was founded in December 2011 by five entrepreneurs including Hari Menon, VS Sudhakar, Vipul Parekh, Abhinay Choudhari, and VS Ramesh. It is one of the largest online food and grocery players in India with operations spread across 26 cities. It is backed by marquee investors like Bessemer Venture Partners, Helion Ventures, Ascent Capital, Sands Capital, Alibaba, CDC, and Mirae.
Bigbasket has also made three acquisitions which helped it enter services such as milk delivery and instant deliveries through vending machines, in a bid to increase frequencies of transactions on its platform.