Paytm to pick stake in BigBasket with $200 million investment; would Amazon lose acquisition deal?
Reports are rife that online marketplace Paytm Mall is looking to pick a majority stake in e-grocer Big Basket by investing $200 million. While both the ecommerce players have refused to comment on this development, insiders (three to be precise) have revealed thatthe talks are very much on.
As per the unidentified sources, the Alibaba-backed company has already started due diligence process to determine Big Basket’s value. After due diligence is completed, the final offer would be made. But Paytm is willing to invest $200 million.
“(Even) before the due diligence, Paytm (Mall) has offered $200 million to own a majority stake in BigBasket… The final agreement will be made only after due diligence process gets over.”
Would Paytm snatch away Big Basket from Amazon?
While theFlipkart-Amazonwar often hogs the limelight, the Paytm-Amazon war too is getting intense.
In June this year, Big Basket signed anexclusivity agreementwith Amazon to discuss an acquisition deal. The online grocer is contract bound to not engage in any acquisition talks with some other firm. But Big Basket was free to talk to investors for raising funds. AndPaytmis that investor which is ready to pour $200 million.
According to industry experts, Paytm is looking to gain more from the investment in order to outrun Amazon.
“The deal will help Paytm Mall strengthen its online-to-offline strategy (using BigBasket’s partnerships with corner stores), helping them take on Amazon,”saidan insider.
The sources also revealed that picking up a major stake might be just the first step in acquiring Big Basket and scaling up its business.
“BigBasket is the largest e-grocer, and was valued at $450 million in March 2016. This can, however, be a precursor to an acquisition,” a sourcedisclosed.
BigBasket is in an enviable position
Both the online marketplaces, Amazon and Paytm have deep pockets (Amazon’s founder Jeff Bezos and Alibaba’s Jack Ma). Therefore, Big Basket is set to gain a lot, irrespective of who acquires it. The company is on a high afterwitnessing three-fold growthin sales. The e-grocer is also positive about reaching profitability by 2020.