First tranche, pegged at $10 million, is likely to close in the next three weeks
By Aditi Shrivastava
BENGALURU: US retailing behemoth Walmart has committed to investing close to $50 million in fresh fruit and vegetable supply chain startup Ninja-Cart, three people in the know of developments said.
The first tranche, pegged at $10 million, is likely to close in the next three weeks, two of the people told ET, and Walmart will get a board seat in Ninja-Cart as part of the transaction.
Walmart, which operates cash and carry stores in India under the Best Price brand, will also enjoy a right to further invest in the startup, as per the deal terms. This gives Walmart a stronger foothold in the fresh produce segment, widely perceived as one of the biggest, but underserved and complex categories, while also helping Flipkart in scaling up its grocery business. For now, there will be no direct integration of NinjaCart with Flipkart’s grocery play. The Indian ecommerce firm is majority owned by Walmart.
“Flipkart wants to scale its grocery and fresh going ahead. Separately, this also supplements Walmart’s cash-and-carry supply chain, which is why this investment makes sense,” said an investor directly aware of the deal.
“As a policy we don’t comment on market speculations or rumours,” a spokesperson for Walmart India said. NinjaCart did not respond to ET’s email seeking comment.
NinjaCart, which raised $90 million in a financing round led by Tiger Global earlier this year, has held discussions with multiple large conglomerates for a potential investment, including Amazon India, as they look to get a piece of India’s largest business-to-business opportunity. This is a segment that has seen heightened interest from a slew of large companies including Udaan, Amazon, BigBasket and Reliance industriesNSE -3.82 %, nudging Walmart to move quickly.
Last month, Walmart India launched its third cash and carry store — Best Price Modern Wholesale Store — in Telangana state. It also runs 25 stores under the Best Price brand, a membership-based programme that counts more than one million members, a majority of whom are small resellers and kirana stores (mom and pop stores).
The retailer, which has been present in India since 2009, already sources a bulk of items from small farmers and the regional supplier ecosystem. NinjaCart connects farmers directly with businesses, cutting out middlemen and helping them earn about 20% more for what they produce. The company provides a complete supply chain suite through its network of collection centres, fulfillment centres and distribution centres. “Walmart’s strategy in India is winning kirana stores. They want to build capabilities to help kirana stores scale, and at the same time, focus on small farmer improvement,” said a person aware of Walmart’s plans. “NinjaCart fits the bill to scale that piece rapidly,” she said.
NinjaCart delivers over 1400 tonnes of produce every day to over 50,000 stores, benefiting more than 25,000 farmers, according to Thirukumaran Nagarajan, its chief executive. Nagarajan declined to comment on the ongoing investment round. In April, NinjaCart raised Rs 624.8 crore, led by Tiger Global. In June, the company raised an additional Rs 62.4 crore at a valuation of Rs 2,429.1 crore from Tanglin Venture Partners and Tiger Global. In June, the company raised an additional Rs 62.4 crore at a valuation of Rs 2,429.1 crore from Tanglin Venture Partners and Tiger Global.