Abraaj adds another e-commerce investment with Indian online grocer

The Abraaj Group has announced its third e-commerce investment in the past 15 months, leading a US$150 million investment in the Indian online grocer BigBasket.

The new funds will be used to increase the penetration of India’s largest online food and grocery store in cities including Bangalore, Mumbai, Pune, Kolkata and Hyderabad, together with expansion into a series of Tier 2 cities and the scaling up of its recently launched express delivery service.

“The strength of BigBasket’s business, which amounts to a transformational experience for its target consumers, is evident from the success of this fundraising,” said Omar Lodhi, Abraaj’s head of Asia.

“Abraaj will leverage its strong experience in the consumer sector to enable BigBasket to further enhance its strong domestic position.”

The acquisition comes at a time of rapid expansion for India’s e-commerce sector, as the country’s population increasingly comes online thanks to the advent of cheap smartphones.

The country’s internet user base is forecast to exceed 670m by 2020, growing to 1 billion people by 2030, according to recent research from Goldman Sachs, with the e-commerce market set to grow to $300bn by that time.

BigBasket said in December that its revenues for 2015 hit 2.1bn Indian rupees (Dh225.7m). The company has plans to become one of the three largest grocery providers in the country by 2018, when it expects its annual revenues to rise to $1bn, according to reports in the Indian media in December.

The capital raising involved new investors including the International Finance Corporation and Sands Capital, as well as existing BigBasket investors such as Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital, Abraaj said.

The Dubai-based private equity group did not disclose the level of its contribution to the fundraising effort.

The BigBasket deal comes just over a year after Abraaj’s acquisition of a 25 per cent stake in the Turkish online retailer Hepsiburada, its first foray into the e-commerce market.

Abraaj followed the Hepsiburada deal last November with a $60m round of fundraising for the Dubai-based app-based car service Careem.

The BigBasket acquisition is Abraaj’s third Indian deal in the past five months.

The group agreed in January to buy a majority stake in the fifth largest healthcare provider Care, based in Hyderabad, from the US’s Advent Capital for an undisclosed sum.

Abraaj in October partnered with the Indian conglomerate Aditya Birla to invest in developing solar power plants in India.


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John Everington

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