According to the people in the know of things, if the deal goes through, SoftBank Group — an existing investor in Grofers, will participate in a $60-100 million funding round in the merged entity.
The talks, which are in early stages, may value BigBasket at about $700 million to $800 million, while Grofers could be valued at $150 to $200 million, the report added.
Apparently, BigBasket has had talks with investors such as Walmart Stores Inc, Amazon.com Inc, Tencent Holdings Ltd, and Fosun International Ltd in the past for possible funding but nothing materialised and this could be one reason for the merger.
With $6 million cash burn per month, BigBasket is keen on getting the deep-pocketed SoftBank on board. While BigBasket hasn’t commented on the reports, Alibinder Dhindsa, founder and chief executive of Grofers said, “The team at Grofers is focused on executing on our long-term strategy and we are well capitalised for that with an investor set that supports the vision. We don’t need to make any strategic moves at this time.”
BigBasket has so far raised more than $220 million in funding from investors including Abraaj Group, Bessemer Venture Partners, Sands Capital and International Finance Corp. In March last year, it raised $150 million at a valuation of about $450-500 million. Last month, the company raised $45 million in Series E funding round.
Grofers, on the other hand, has so far raised $165 million from Tiger Global Management and SoftBank, among others.