A turbulent flight turned out to be a blessing in disguise for K Ganesh, serial entrepreneur, investor, and promoter of online grocery platform, BigBasket, which is now part of the Tata Group.
BigBasket had just been launched in late 2011, with ambitions to disrupt online grocery delivery in India. While Flipkart had launched a few years ago in 2007, Amazon was yet to go live in the country then, leaving space for a vertical e-commerce player in the market. But investors didn't buy the idea.
Every pitch from Ganesh would be countered with the collapse of Webvan, an online grocery startup that went bust in 2001 in the aftermath of the dot-com crash in the US. Close to 8 or 9 venture funds turned down BigBasket when a flight and some turbulence changed its fortunes.
"I was travelling from Mumbai to Chennai and was seated next to Raja Kumar of Ascent Capital. It was a 1 hour, 45-minute flight, there was a lot of turbulence, so we were advised to wear out seatbelts throughout. So Raja had no choice but to sit beside me throughout and listen to BigBasket. Ascent is a private equity firm and wasn't an investor in e-commerce then," Ganesh told Moneycontrol.
But the startup's differentiation and founding team, besides Ganesh's persuasion clicked. Ascent Capital invested $10 million in BigBasket's Series A round in March 2012, when it was a Bengaluru-focussed operation, clocking around 10,000 orders a month. Last week, the Competition Commission of India approved Tata Digital's acquisition of BigBasket, in a deal that is pegged at $1.2 Billion, giving BigBasket a post-money valuation of $1.8 Billion.
If the flight turbulence helped BigBasket secure its first cheque from an institutional investor, a series of serendipitous events led to its creation in 2011.
In 1999, K Vaitheeswaran, VS Sudhakar, Vipul Parekh, Hari Menon, VS Ramesh, and Sundeep Thakran founded Fabmart, what was then India's first e-commerce company. Fabmart also built a physical retail chain called Fabmall, which was later sold to Aditya Birla Group and rebranded to 'More', which was in turn acquired by Amazon in 2018.
While Vaitheeswaran took the online venture forward under the name Indiaplaza.com, (which shut down in 2013), Menon, Sudhakar, Parekh, and Ramesh went their separate ways before coming together with Abhinay Choudhari to launch BigBasket. Menon, Sudhakar, Parekh, and Ramesh initially were advisors to Choudhari's online grocery startup ShopasULike in July 2010, which used to deliver to a few residential complexes in Bengaluru.
According to the book, Saying No to Jugaad - The Making of Big Basket by TN Hari and MS Subramanian, in July 2011- three promoter groups - K Ganesh, Meena Ganesh, and Srinivas Anumolu, the former co-founders of Fabmart and Choudhari came together, with plans to launch a new company and brand. Thus, BigBasket was created on December 3, 2011.
Ganesh and the BigBasket founders go back a long way, as Fabmart was one of the first clients of Customer Asset, a BPO founded by Ganesh that was later sold to First Source.
The BigBasket acquisition will pit the Tatas against Walmart-owned Flipkart, Amazon, SoftBank-backed Grofers, and Reliance Industries' JioMart in the online grocery space in India.
It will also bolster Tata group's ambitions to build a super app, where it plans to add categories such as groceries, health, education, entertainment, electronics, fashion, travel, beauty, and lifestyle. It also plans to leverage the strength of group companies such as Titan, Voltas, Trent, Tata Consumer Products, Tata Motors, Vistara, Tata AIG, Tata Capital, and Taj Hotels, offering users an array of services in one app.Disclosure: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.