BigBasket.com Gets $10 Million From Ascent Capital: A Big Push For Online Grocery Stores?

Ascent Capital has invested $10 million (@ Rs. 50 Crores ) in Series A funding in BigBasket.com, an online grocery store.

The Equity firm & BigBasket.com are operating from Bangalore & the site currently offers more than 6000 products under the daily needs & groceries segment. With average sale upwards of Rs. 1200 per 300 daily transactions, BigBasket.com seems to have begun well, reveals V S Sudhakar, one of the co-founders of BigBasket “The ramp-up has been faster than we anticipated. The inertia of spending on the internet is no longer there, and technology platforms are more robust and much cheaper.” The site stocks private labels for most staples with direct-sourcing deals, thereby aggregating  better margins.

BigBasket.com was started by internet veterans who founded Fabmart and Fabmall. The funds would be used to augment capacity, service and merchandise selection. The company also aims to spread across the top five metros by the 2012 end. Interestingly, this funding by Ascent Capital marks its biggest ever first-round support for a e-grocer.

Traditionally, groceries were offered by Brick-and-Mortar stores. Big chains like Food Bazaar, Reliance Fresh and Star Bazaar did try to get into the online retailing sphere as well, but could not make a sizable dent. This is truly ironic for a country that offers critical support to the back-end engines of global giants like Wal-Mart and Tesco. Online grocery retailing holds the key to truly re-arrange the grocery retail game in urban India.

The Ascent teams truly feels that given the earlier experience of BigBasket head honchos, it has made a wise decision. “The success of Ocado and Tesco.com in the UK, Yihaodian in China and FreshDirect in the USA indicates that there is an untapped opportunity,” says Ascent’s Kondur. Ascent Capital, manages US$ 600 Million across three funds, but this is the first reported investment in a technology company after five years.

Have you started buying groceries online?

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