According to a Goldman Sachs report, the Indian online grocery market is expected to reach $40 million in FY2019 and is expected to grow at a CAGR of 62% from 2016 to 2022. According to Crisil, online grocery in India is expected to grow between 65-70% annually to $1.4 billion by 2020. A leading player in this industry is BigBasket, which recently joined the Billion Dollar Unicorn Club.

BigBasket’s Financials

Bangalore-based BigBasket was founded in 2011 by Abhinay Choudhari, Hari Menon, VS Sudhakar, VS Ramesh, and Vipul Parekh as an online grocery store. BigBasket currently operates in 30 cities. It has over 10 million customers and receives nearly 100,000 orders per day. BigBasket expects to end FY 2019 with revenue of INR 3,500 crore ($506 million) and INR 7,000 crore ($1 billion) in FY2020.

BigBasket has two registered operating entities – its B2B segment or wholesale arm Supermarket Grocery Supplies, and the online grocery portal Innovative Retail. For FY 2018, the wholesale segment revenue grew 35% to INR 1,583 crore ($226 million) while net losses narrowed by 52% to INR 310 crore ($44 million). Innovative Retail segment revenue grew 29% to INR 1,410 crore ($201 million) and net losses reduced by 6% to INR 179 crore ($25 million) in FY 2018.

BigBasket has raised $989.5 million from investors including Abraaj Group, Alibaba Group, Ascent Capital, Bessemer Venture Partners, Brand Capital, Helion Venture Partners, ICICI Venture, IFC Venture Capital Group, LionRock Capital, Paytm Mall, Sands Capital Management, Sands Capital Ventures, Trifecta Capital, Zodius Capital, Mirae Asset-Naver Asia Growth Fund, and CDC Group. Its latest round of funding was held in April this year for $150 million at a valuation of $1.2 billion. In an earlier round in February last year, it received $300 million at a valuation of $900 million. In September 2017, it had raised $280 million at an estimated valuation of $600 million -$800 million.

BigBasket’s Expanding Offerings

BigBasket plans to spend $100 million on re-engineering its supply chain to reduce the time from farm to its customers and allow for faster delivery to its resellers. To increase revenue and profitability, it is expanding the range of private label products. It expects to increase the share of private label products to 40% by the end of 2019. It plans to ramp up to 20 large and 100 smaller distribution centers by June this year.

In September 2018, BigBasket started its milk subscription business called BB Daily for delivering milk and other items in the morning. Today, it carries out 90,000-100,000 orders a day and aims to increase it to a million orders a day and to 50% of the apartment complexes across the ten major cities it operates in.

Another successful venture last year was the BB Instant service, which was launched as a pilot with IoT-enabled smart vending machines startup Kwik24. Customers can order fresh produce and other FMCG products through the BB Instant app and pick it from the vending machine. It has 200 unmanned vending machines in offices and apartment complexes in Bangalore. It plans to have 2,000 such machines across 10 major cities over the next year.

In 2018, BigBasket went on to acquire Kwik24 to scale the vending machine operation and subscription-based morning essentials delivery company RainCan and daily essential ordering platform Morning Cart to strengthen its BBDaily service. The terms of the deals were not disclosed.

Founded in 2016 by Neeraj Ray and Samir Duggal, Kwik24 had raised $374 K from Fireside Ventures. Kwik24 had deployed its IoT-enabled vending machines at over 30 corporate locations in Bangalore before its residential pilot with BigBasket.

Founded in 2015 by IIT Bombay alumni Abhijeet Kumar and Munendra Singh, RainCan had raised close to $1 million from angel investors including Prabodh Agarwal, Aniruddha Malpani, Ajeet Khurana, and Nikunj Shah.

Founded in 2016 by Satish Shetty and Anuj Bishnoi, Morning Cart was bootstrapped. It had about 4,000 subscribers to its micro-delivery platform.

BigBasket competes with Grofers, Amazon, and Flipkart in the online grocery space. With the expansion into the micro-delivery space, it competes with Milkbasket which had raised $22 million in funding, DailyNinja which has raised $10 million, and Doodhwala, which has raised $14.2 million in funding.

BigBasket plans to use the micro-delivery business to increase its stickiness and accelerate its overall scale. What other services can BigBasket offer or acquire to increase its stickiness?