Also in this letter:
■ Blinkit gets another $100 million from Zomato
■ Hero Electric plans to build four EV plants
■ Loco raises $42 million, and other done deals
BigBasket’s valuation jumps to $2.7 billion after secondary share sale
Egrocer BigBasket has seen its valuation jump to $2.7 billion following a secondary share sale earlier this year.
Brand Capital, the strategic investment arm of the Times Group, has part sold its stake in the firm to Tata Digital, people briefed on the matter said.
The news comes as Tata Digital seeks additional cash from holding company Tata Sons to fuel its ambitious growth plans, as we reported on March 9.
Undervalued? Existing investors – Tata Digital and others – internally value the firm at $4-5 billion on the basis of its gross sales and projected annual growth in the coming years, sources told us.
“Given the strong growth BigBasket is planned for, its valuation is much higher than the recent secondary share sale. The company has projected an annual growth of at least 40% in its gross sale in the next couple of years,” a person briefed on the matter said.
In May 2021, Tata Digital acquired a majority stake in BigBasket at a valuation of around $1.8 billion. Soon after, it pumped around $200 million into the firm, valuing it at $2 billion, we reported on May 28 last year.
Tata Digital funding talks in limbo: The steep rise in BigBasket’s valuation comes at a time when Tata Digital’s discussions with marquee global investors to raise new capital for its ecommerce venture have hit a hurdle.
We reported on March 9 that Tata Digital has sought additional funds from its holding company Tata Sons as these global investors are waiting to see how the super app performs before committing funds.
Blinkit gets $100 million from Zomato, in talks to raise another $300 million
Blinkit (formerly Grofers), which recently pivoted to the quick commerce segment, has closed an additional $100 million financing as a part of its ongoing fundraise, cofounder and chief executive Albinder Dhindsa told employees on Thursday.
The funds are being raised through convertible notes from Zomato, which will later be converted into equity, people aware of the discussions told us.
This is part of a larger $400-million funding Blinkit is looking to raise from Zomato and other investors, which is expected to close in the next two quarters, one of the persons aware of the discussions said.
It is in addition to the $100 million that Zomato invested in the company and its wholesale entity last year, catapulting the quick commerce startup’s valuation to $1 billion.
Volatile markets delayed round: We first reported in November that Zomato may invest $500 million in Blinkit to push its quick commerce ambitions, potentially valuing the company at $1.5 billion. The company has also raised the upper limit of its potential investments in the quick commerce segment, it said last month.
However, the volatility in the public markets and its effect on Zomato’s share price has delayed the round, which was expected to close this month.
- “The market conditions have affected Zomato, and thus Blinkit’s planned fundraising. The funding is expected to be negotiated again, with fresh terms. To go ahead with its plans, Blinkit for now has raised the first tranche of $100 million from Zomato,” a source told us.
Zomato’s stock has shed over 41% in the past three months, owing to a sell off in tech stocks and, more recently, increased volatility due to Russia’s invasion of Ukraine.
TWEET OF THE DAY
Hero Electric plans four EV plants to make five million two-wheelers a year
Hero Electric MD Naveen Munjal
Hero Electric has drawn up a roadmap to manufacture five million electric two-wheelers a year, almost half of that of top petrol-run two-wheeler maker Hero MotoCorp, amid rapid adoption of EVs in India.
Show me the money: Hero Electric may need an investment of Rs 1,500-2,000 crore to execute this plan, which involves setting up two greenfield factories in South and West India, a top official said. It is considering a fresh round of fundraise, having secured funding in 2018 and 2021.
Managing director Naveen Munjal said the transition to EVs is happening swiftly, with demand outpacing supply, and that he expects 30% of the Indian two-wheeler market to move to EVs by 2025.
The company is engaged in a court battle for the rights to the ‘Hero’ brand with family rival Hero MotoCorp, which last week announced plans to enter the EV market later this year.
ETtech Done Deals
■ Game streaming platform Loco said it has raised $42 million (Rs 330 crore) in a funding round led by crypto major Hashed, with participation from Makers Fund, Catamaran Ventures, Korea Investment Partners, Krafton, Lumikai, and Hiro Capital.
■ Audio content platform Kuku FM has raised $19.5 million as a part of a funding round led by South Korean gaming giant Krafton. The round also saw participation from its existing investors including 3one4 Capital, Vertex Ventures, and India Quotient. Founder Bank Capital and Verlinvest came on as new investors.
■ Fresh produce supply chain startup Ninjacart said it has acquired Tecxpryt, a software as a service (Saas)-based communication platform. The entire team of Tecxprt will join Ninjacart as a part of the deal. The company did not disclose the transaction size.
Credit card spends fell 7% in January, marking end of festive season
Credit card spends fell in January from the previous month, signalling the easing of consumer spending after the festive season.
Spending fell 7% sequentially to Rs 88,000 crore in the first month of the year. Among larger players, HDFC Bank saw a decline of 8% in credit card spending from December. SBI Cards recorded a 6% fall and ICICI Bank a 5% drop. Axis Bank and Kotak Mahindra Bank were the only banks that did not see a drop.
According to an analysis by Motilal Oswal, all large players reported a decline in monthly spending per card, with IndusInd Bank (Rs 5,700) and American Express (Rs 4,100) showing sharpest fall. Among others in this group, the decline was Rs 1,400 per card for HDFC Bank and Rs 1,100 for ICICI Bank.
Other Top Stories By Our Reporters
Menlo Micro raises $150M: Menlo Microsystems said on Thursday it has raised $150 million in a funding round led by Vertical Venture Partners and Tony Fadell’s Future Shape. Russ Garcia, Menlo Micro CEO, said the funds will help the company expand its manufacturing in the US and accelerate the development of its power roadmap to solve challenges.
Public sector spends $2M a year destroying SSDs, says study: Study reveals public sector New research by Blancco Technology Group shows that the Indian government and public sector organisations spend as much as $2 million a year on the physical destruction of solid-state drives (SSDs). Replacement costs added another $3.5 million, taking expenses to $5.5 million for destroying public sector technology that is often still usable.
Global Picks We Are Reading
■ Commercial satellites push the bounds of the Russia-Ukraine conflict (The Washington Post)
■ Uber, Bolt, Didi drivers in South Africa are using a hack to dodge fees (Rest of World)
■ Crypto industry on defensive as Ukraine crisis spotlights Russia sanctions compliance (Reuters)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai and Judy Franko in New Delhi. Graphics and illustrations by Rahul Awasthi.
