Employees arrange tomatoes before weighing them at a BigBasket warehouse on the outskirts of Mumbai. Danish Siddiqui / Reuters
Employees arrange tomatoes before weighing them at a BigBasket warehouse on the outskirts of Mumbai. Danish Siddiqui / Reuters

Alibaba is said to invest $200 million in Dubai's Abraaj Group-backed Indian online grocer



Alibaba Group Holding, China’s e-commerce giant, plans to invest about $200 million (Dhs735 million)  in India’s largest online supermarket, Bigbasket, leading a $280 million funding round in the startup, according to people familiar with the negotiations.

Alibaba is taking a stake of about 25 per cent in Bigbasket after months of negotiations, said the people, asking not to be identified because the matter is private. The Bangalore-based grocery business had previously been in talks for an investment from e-commerce pioneer Amazon.com, which in June agreed to acquire US grocer Whole Foods Markets.

In 2016, Dubai-based Abraaj Group led a $150 million round of fundraising for online grocer. The fundraiser saw the entry of new investors such as the International Finance Corporation and Sands Capital as well as participation from existing investors such as Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital.

The investment marks an escalation in the competition between the world’s two largest e-commerce companies in India, one of the world’s fastest-growing -- and as yet unconquered -- online retail markets. Amazon founder Jeff Bezos has vowed to invest $5 billion in the country as he challenges local leader Flipkart Online Services. Alibaba has invested in One97 Communications Ltd, which runs digital payment and e-commerce businesses.

The Bigbasket deal is awaiting approval from the country’s antitrust authority, the Competition Commission of India, the people said. That is now seen as a formality and should come through any day, one person said.

Bigbasket and Alibaba did not respond to emails seeking comment on the new funding.

The deal values Bigbasket, a purveyor of groceries and household needs like toothpaste and freshly-ground masala (spice) powders, at $800 million. An affiliate of One97’s Paytm E-commerce may join Alibaba in its $200 million stake with a small investment, the person said.

Grocery and daily essentials is a challenging business the world over, even in advanced markets like the US and China. Bigbasket, owned by Innovative Retail Concepts, operates in a country where expansion is difficult beyond the biggest cities because of rudimentary logistics and a shortage of refrigerated trucks and warehouses.

Growth will require capital expenditures, and Amazon got government approval earlier this year to invest $500 million into food retailing. Several high-profile grocery startups have collapsed in the last couple of years in India.

At the same time, online retailers can build loyalty and push high-margin private labels and fresh produce to buyers in the e-commerce segment that sees the highest repeatability.

Bigbasket's TV commercials feature Bollywood actor Shahrukh Khan shopping for his home and then endorsing in Hindi "Main ek Bigbasket-eer hoon, aur aap?" (I'm a Bigbasket-eer, and you?). The company now delivers in over two dozen Indian cities and offers 18,000 products from over 1,000 brands.

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Alibaba’s new ‘Tech Town’  in Dubai is worth... $600m

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The world’s most valuable start-up in 2018, TikTok, is valued at... $75bn

Boost to the UAE economy of 5G connectivity will be... $269bn 

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Date started: January, 2014

Founders: Mike Dawson, Varuna Singh, and Benita Rowe

Based: Dubai

Sector: Education technology

Size: Five employees

Investment: $100,000 from the ExpoLive Innovation Grant programme in 2018 and an initial $30,000 pre-seed investment from the Turn8 Accelerator in 2014. Most of the projects are government funded.

Partners/incubators: Turn8 Accelerator; In5 Innovation Centre; Expo Live Innovation Impact Grant Programme; Dubai Future Accelerators; FHI 360; VSO and Consult and Coach for a Cause (C3)

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Stage: Pre-seed capital raising of $1 million
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1. Labour productivity is lower than the average of the developed economies, particularly in the non-tradable industries.
2. The low level of basic skills among workers and the high level of inequality between those with various skills.
3. Low employment rates, particularly among Arab women and Ultra-Othodox Jewish men.
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6. The poverty rate at more than double the OECD average.
7. Population growth of about 2 per cent per year, compared to 0.6 per cent OECD average posing challenge for fiscal policy and underpinning pressure on education, health care, welfare housing and physical infrastructure, which will increase in the coming years.


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