Venture capital firm Trifecta Capital on Monday said it has provided Rs 100 crore in venture debt to SuperMarket Grocery Supplies, which operates the online food and grocery delivery startup BigBasket.
"This is the largest venture debt transaction in the country... The funds will be used to meet the working capital and capex requirements of the company," BigBasket said in a statement.
This includes setting up new warehouses, strengthening the cold chain, facilities for reprocessing of fruits and vegetables and for scaling up of BigBasket's supply chain for the recently launched milk subscription business BB Daily and its specialty vending machine business BB Instant.
"We have a clearly identified use case for debt. We are present in 26 cities and continue to optimise our supply chain. A significant part of our business is fresh fruits and vegetables, the bulk of which is sourced directly from farms,” said BigBasket co-founder Hari Menon. “It is crucial that we maintain the quality right up to the last mile. Funding such capex requirements is best done through debt.”
BigBasket, which raised $150 million from South Korea's Mirae Asset Management, U.K.'s CDC Group, and existing investor Alibaba Group Holding Ltd. earlier this year, had taken venture debt from Trifecta Capital in 2017. It competes with SoftBank-backed Grofers as well as Amazon India and Walmart-owned Flipkart.
"...(we) realised that it was a more optimal form of financing for working capital and capex. Venture debt not only reduces dilution for all shareholders, it reduces cost of capital, improves ROE and expands runway,” said BigBasket's other co-founder Vipul Parekh.
“We recently raised $150 million from marquee investors and decided to supplement the equity capital with additional venture debt... We hope to be able to leverage their (Trifecta's) bank/non-bank relationships for our future fund requirements.”
BigBasket was founded in December 2011 and has operations in 26 Indian cities. It is backed by investors like Bessemer Venture Partners, Helion Ventures, Ascent Capital, Sands Capital, Alibaba, CDC Group and Mirae Asset Management.
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