Alibaba and PayTM all set to buy up to 40-percent stake in BigBasket

The Alibaba and PayTM Mall together are ready to buy around 35 to 40 percent stake in Indian Grocery Delivery Firm, BigBasket. This deal will be announced soon as per report published by Economic Times. Total transaction will include $220 Million as primary investment and another $80 Million will be used to other investor’s stake in BigBasket, making its valuation to $850 Million.

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This deal was in talks from last six months and looks like finally it is on the cards. Total deal will cost around $300 million investment. The investors of Bengaluru-based BigBasket that are likely to make exit for Alibaba are K Ganesh and Meena Ganesh’s GrowthStory and investment firms Ascent Capital, Zodius Capital and Helion Venture Partners.

Co-Founders of BigBasket, Hari Menon, Vipul Parekh, Abhinay Chaudhary and VS Sudhakar are also likely to sell a portion of their holding in the company. These persons also founded FabMall in 2007 and sold it to Aditya Birla Group.

This acquisition will help Alibaba to enter Grocery business through PayTM Mall. PayTM has a large user base and has seen much success for digital wallet and PayTM payments bank is now functional too. But, company has still not make any hard impact on e-Commerce business. Also company is trying its best to become more than a digital wallet and payment bank. PayTM recently completed acquisition of Little and Nearbuy in India. Also, Indian major e-Commerce giants Amazon India and Flipkart has already shown their interest in Grocery business and started their steps towards achieving the aim.

According to a recent report by Morgan Stanley, the online food and grocery segment will become the fastest growing business by the year 2020 and expected to witness 141% growth annually contributing $15 billion to online e-Commerce business. Now Alibaba’s prime bet in India is PayTM, which is backed by Alibaba and it is the best option for Alibaba to enter grocery business in India. So, investing in BigBasket is a well thought process and might gain great fruits for company.

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