Amazon in talks with NinjaCart to put funds in fresh produce space
Online retail behemoth Amazon has held discussions with Bengaluru-based B2B fresh produce supply chain company NinjaCart for a potential investment, as the US-based technology leader looks to get a foothold in the sector.
The talks, which are still at an exploratory stage, have been ongoing since NinjaCart was in the midst of closing its $100 million equity financing round led by New York-based investment firm Tiger Global Management, according to three sources aware of the development who spoke on the condition of anonymity.
The startup’s latest financing round, which closed in April, also saw hedge fund Steadview Capital invest an undisclosed sum.
Sources also indicated that NinjaCart received significant interest from other retail conglomerates. ET, however, could not ascertain the names of the other parties.
When contacted, an Amazon India spokesperson declined to comment. Separately, NinjaCart did not respond to an email till the time of going to press. Sources in the know said the deal talks may not eventually materialise in an investment from Amazon.
The latest developments come at a time when Amazon has been closely evaluating its entry into the fresh produce segment, widely perceived as one of the biggest, yet underserved and complex categories.
While it already sells select grocery items through Amazon Now and Amazon Pantry, it has yet to formally enter the fresh produce space.
The company pumped Rs 240 crore into its Indian food-only retail business, which acts as a seller of groceries and other packaged food products to the company’s local ecommerce marketplace, signaling its intent to stamp its presence in the space.
Amazon has committed $500 million into the food retail sector, which opened up to foreign investment in 2016.
According to regulatory filings sourced from business signals platform paper.vc, Amazon Retail India received Rs 240 crore, largely from existing shareholder Amazon Corporate Holdings, a Singapore-based entity engaged in food retail across the ASEAN region. The investment also included a token amount from Amazon.com, the US-based parent company.
Amazon had said that the company expects groceries and consumables to contribute more than half of its business over the next five years in Asia’s third-largest economy.
NinjaCart, which was valued at over $350 million after the closure of its last funding round, has emerged as a leader in the space.
In an earlier conversation with ET, Thirukumaran Nagarajan, the chief executive of NInjaCart, had said the company was currently supplying 25,000 tonnes of fresh vegetables and fruits on a monthly basis.
NinjaCart counts Accel Partners US and Accel Partners India, Qualcomm Ventures, Trifecta Capital, NRJN Trust – the investment entity set up by Infosys cofounder Nandan Nilekani and wife Rohini, Jo Hirao, the founder of ZiGeXN, and Russian firm HR Capital among its list of backers. The startup sources produce from more than 170 villages, while also aggregating local kirana stores and vegetable pushcart vendors.
Founded in 2015 by Nagarajan, Kartheeswaran KK, Sharath Loganathan, Ashutosh Vikram, Sachin PJ, and Vasudevan Chinnathambi, NinjaCart is currently present in seven cities, and has till date raised over $140 million.
Domestic unicorns such as BigBasket and Udaan have either already made their presence felt in the fresh produce segment or are expected to enter the space.
Last month, Vipul Parekh, co-founder of BigBasket, told ET that the Alibaba Group-backed company would be utilising an estimated $100 million from its latest $150 million funding round to further build its supply chain and logistics infrastructure.
Food and grocery made up the lion’s share of India’s overall retail market in 2018, contributing $540 billion of the total $880 billion in retail, according to market researcher Forrester.
Source: ET Tech