Grocery etailer Bigbasket has raised Rs 100 crore in venture debt from Trifecta Capital to fund its working capital needs and invest in the supply chain, and warehousing.
The investment comes a few months after Supermarket Grocery Supplies, which owns and runs BigBasket, closed $150 million from Mirae Asset-Naver Asia Growth Fund, Alibaba and CDC Group at a valuation of over $1 billion.
The funds will be used to set up new warehouses, strengthen cold chain, set up facilities to reprocess fruits and vegetables and scale-up milk subscription business – BB Daily and vending machine business – BB Instant.
“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, cofounder, BigBasket.
BigBasket said it will operationally break even in six months on the back of the company’s planned capital expenditure of $100 million in building infrastructure, along with increased scale, technology optimisation, reduced logistics costs and improved margins from its fresh and wholesale business.
For fiscal 2018, BigBasket’s revenue went up 35% to Rs 1,605 crore, while losses narrowed by 60% to Rs 272 crore, according to regulatory filings.
“Venture Debt not only reduces dilution for all shareholders, it reduces the cost of capital, improves ROE and expands runway,” said Vipul Parekh, CFO and cofounder, BigBasket.