In its quest to consolidate its fresh foods delivery business, market leader Bigbasket is trying to take over Milkbasket and DailyNinja. Reports suggest talks are already on and a decision may come through soon. As it happens with most such acquisitions, the sticking point appears to be the valuation of Milkbasket, which, according to Bigbasket, is not more than $15 million (enterprise value). Unilever Ventures is a key investor in Milkbasket. Bigbasket itself has the backing of Alibaba. On many occasions, it is the investors who call the shots and the promoters may have to play along. At last count, Bigbasket was valued at $1.2 billion.
Milkbasket is reportedly being wooed by other players in the field, Amazon India, Swiggy and the delivery startup Dunzo.
None of these talks have reached any conclusive stage. Milkbasket is possibly seeing the threat looming with at least three big players slated to enter the daily fresh food delivery business. Amazon India that has set up a separate entity to be in compliance with the FDI rules, Flipkart and Reliance are the three companies in various stages of taking positions across the country on delivering fresh foods like milk, bread, eggs, vegetables and fruits. A standalone operator like Milkbasket, with operations in limited geography and handling daily orders of around 40,000 to 50,000 stands very little chance of surviving when the battle becomes bigger. It is advisable for them to align with one of the bigger players to safeguard the business. Having been confined to the Delhi-NCR market for a long time, Milkbasket has moved to Bengaluru and Hyderabad as well later.
Reports say, Bigbasket has already moved ahead with the taking over of DailyNinja. The startup’s major investors Sequoia Capital and Matrix Partners, are said to have deputed their teams to Bigbasket to work out the finer details of the deal.
Bigbasket has a dedicated app BBDaily which enables the user to place orders and register and subscribe for daily supplies of products like milk. Additional items can be added and the deliveries are made before 7am.
Bigbasket is also gearing itself to take on the big three as they keep expanding their footprints. Amazon and Flipkart may have a slight head-start since they have been around for long enough to have built a loyal base of customers. Reliance, though new to the online trade, has the advantage of its offline stores throughout the country and can leverage that to quickly scale up. Online food order delivery major Swiggy also has plans of wanting to enter this business. It has a backbone of delivery executives and it already delivers breakfast to its customers. Adding the fresh vegetables and fruits won’t do any harm.
Besides Unilever Ventures, the other investors to have put in a total of $26 million in Milkbasket are Blume Ventures, Kalaari Capital, Mayfield and Beenext.