Indian e-grocery unicorn Bigbasket acquires rival DailyNinja as Covid-19 lockdown comes into force

Bigbasket, one of India’s largest online grocery companies, has wholly acquired milk delivery app DailyNinja. Financial terms of the deal were not disclosed, though the Bengaluru-based buyer is rumored to have paid between $15 million and $20 million.

The purchase will allow Bigbasket to further strengthen its presence in its home city, which is also DailyNinja’s base of operations. Prior to the deal closing, DailyNinja was reportedly serving around 110,000 subscribing customers each day in the southern Indian city.

Bigbasket runs BB Daily, its own subscription service for daily delivery of milk and other staples. It claims that BB Daily makes 160,000 deliveries before 7am each day, offering milk and other dairy products as well as eggs, bread, breakfast cereal, and drinking coconuts.

More than milk

One of the key attractions of acquiring DailyNinja was its network of 2,000 milk suppliers across the country.

“Business with small traders is a key and growing part of Bigbasket’s business. DailyNinja currently has a large network of milkman partners which will enable us to expand our offerings under BB Daily,” Bigbasket co-founder and CEO Hari Menon said in a statement.

“We also aim to improve delivery productivity and achieve breakeven much sooner than planned.”

Bigbasket estimates that the acquisition of DailyNinja’s operations will allow it to expand BB Daily’s business by as much as 200% over the coming year. It also claims that the deal will benefit DailyNinja by doubling its own business within a month, thanks to BB Daily’s deeper supply chain capabilities and the broader range of non-dairy products it can offer its customers.

It isn’t the first time that Bigbasket has taken over a business like this. In 2018, it wholly acquired milk-delivery startups Morning Cart and RainCan.

Lockdown uncertainty

Like their brick-and-mortar counterparts, Indian e-grocers have experienced a huge uptick in demand as the situation around the Covid-19 pandemic has developed. India announced a 21-day total lockdown at the federal level two days ago. But many state and city governments across the country had already implemented their own curfews and restrictions in previous weeks, leading to a spate of panic buying both offline and online.

The global outbreak, and the lockdowns that governments are enforcing worldwide to ensure people stay at home and slow the spread of the virus, has been seen by many as a significant opportunity for online businesses offering meal and grocery deliveries.

But the story for India’s e-grocers doesn’t seem to be quite that simple. Bigbasket recently introduced caps on how much each customer can purchase. In some parts of the country, the authorities are reportedly pressuring food and grocery delivery apps to shut down.

Quartz reports that, in some districts, visitors to the Bigbasket website or app are greeted with a message saying: “Dear customer, we are not operational due to restrictions imposed by local authorities on the movement of goods in spite of clear guidelines provided by central authorities to enable essential services. We are working with authorities to be back soon.” BB Daily is reportedly only offering milk for sale in certain areas.

At time of publication, a message on the front page of Bigbasket’s website said that the company is “currently experiencing unprecedented demand” and is therefore “restricting access to our website to existing customers only.”

Unicorn status

According to AgFunder’s Agri-FoodTech Investing Report 2019, Bigbasket was among the highest-funded eGrocery startups globally last year. It scored $150 million in a May funding round, which saw participation from investors including China’s Alibaba, South Korea’s Mirae Asset-Naver Asia Growth Fund, and the UK’s CDC Group. The Series F injection propelled the startup to unicorn status.

Bigbasket’s archrival Grofers closed its Series F in the same month, pulling in $220 million from Softbank’s Vision Fund, Tiger Global, KTB Ventures, and Sequoia Capital, among others. The Gurugram-based company secured a further $70 million from the Vision Fund later in the year.