Earlier, we reported that hyperlocal delivery service providers BigBasket and Grofers are in talks for a potential merger. Now, in a major turn of events, reports suggest that Amazon India is in talks with BigBasket for an acquisition.

With this acquisition, the US-headquartered e-commerce firm is stepping up its efforts to gain ground in the fast-growing market.

The people aware of the development said that the discussions are at an early stage and may not lead to a sale. BigBasket is India’s largest online grocery firm and operates in about 25 cities across the country.

Further, providing details about this development, a person aware of the matter said that Amazon and BigBasket have not yet agreed to any specific terms, adding that BigBasket has also had discussions with private equity firms.

The development comes at a time when the government said that it will soon clear Amazon’s proposed $500 million investment in retail of food products in India.

Amazon has been expanding in online food and grocery sales as it seeks to increase its product offerings. Earlier this year, the company opened drive-in grocery locations in Seattle, its home town, as part of a renewed effort in the business.

BigBasket had raised $150 million last year in a funding round led by Dubai’s Abraaj Group, and its backers also include Bessemer Venture Partners and Helion Venture Partners. In March this year, it raised ₹45 crore ($7 million) in venture debt from Trifecta Capital to set up new warehouses and strengthen its delivery network.

A couple of months ago, we reported that BigBasket and Grofers – the leading startups in the online grocery delivery space, were reportedly in talks regarding merging their businesses. SoftBank Group — an existing investor in Grofers, was also said to participate in a $60-100 million funding round in the merged entity.

BigBasket was hoping for a valuation of at least $700-800 million, while Grofers was said to have been valued at $150-200 million. However, nothing has come out from the talks so far.
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