India’s largest online grocer, BigBasket has clinched Rs 100 crore of venture debt from Trifecta Capital, making it one of the largest venture debt transactions in the country.
The funds will be used to meet the working capital and capital expenditure requirements of the company including setting up new warehouses, strengthening the cold chain, setting up facilities for reprocessing of fruits and vegetables and for scaling up its supply chain for the recently launched milk subscription business - BB Daily and its specialty vending machine business - BB Instant, the company said in a statement.
“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 Hari Menon, co-founder, SuperMarket Grocery Supplies Pvt. Ltd, that owns and operates the online food and grocery portal BigBasket.
The company has taken venture debt from Trifecta Capital in 2017 and feels it is a more optimal form of financing for working capital and capex. “Venture debt not only reduces dilution for all shareholders, it reduces cost of capital, improves ROE and expands runway. We recently raised $150 million from marquee investors and decided to supplement the equity capital with additional venture debt. Given our relationship with Trifecta Capital and their understanding of our business, they were the obvious choice” said Vipul Parekh, co-founder and CFO, SuperMarket Grocery Supplies Pvt. Ltd.
BigBasket’s $150 million Series F fund raise in March at a post-money valuation of $2.28 billion, took the company into the Unicorn league. According to RedSeer Consulting, India’s $500 billion plus grocery market of which a mere 0.2 per cent is online is estimated to grow at 50 per cent for the next few years.