Reliance Industries is in talks to acquire online furniture brand Urban Ladder and milk delivery platform Milkbasket as it looks to strengthen its e-commerce play, said multiple sources familiar with the matter.
This comes at a time when the Mukesh Ambani-led conglomerate is also said to be in talks to acquire players like e-pharmacy startup Netmeds and lingerie retailer Zivame, even as it scripts consolidation with Future Retail.
The discussions with Urban Ladder have been going on for the last few months and are now at an advanced stage, said four sources briefed on the matter. A deal with Urban Ladder could be pegged at around $30 million, including further infusion in the business and earn-out for the management team, said one of the sources. “They have got interest from other players as well and, while the discussions are advanced, a deal has not been finalised yet,” said another source mentioned earlier.
Milkbasket’s previous talks with firms like Bigbasket and Amazon India haven’t fructified due to valuation mismatch, according to one of the sources. “They (Milkbasket) are negotiating for a better valuation than previous suitors and are thus in discussions with RIL. The recent capital infusion of $5 million has bought them extra time,” this person said.
As reported by TOI in March, Bigbasket held talks with Milkbasket, looking at a valuation of under $15 million. The Bengaluru-based Bigbasket, at the same time, also acquired DailyNinja to boost its subscription-based morning delivery business BB Daily.
Since the pandemic, grocery orders online have increased, including daily essentials like milk, bread and eggs. But for players like Milkbasket, which focus on daily essentials, margins are thin as milk is the core product of delivery even though companies have been trying to bundle non-milk products to increase their revenue per order. Improving unit economics has so far been a challenge in this space, triggering consolidation.
“It would not be productive to comment on media speculations,” said Urban Ladder co-founder Ashish Goel when contacted by TOI, adding that the company is “working round-the-clock to rejuvenate the business”. Milkbasket co-founder and CEO Anant Goel did not respond to TOI’s emailed query.
“As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis,” an RIL spokesperson said, adding it will “make necessary disclosures” to stock exchanges.
According to a Milkbasket statement in June, it serves over 100,000 households across Gurgaon, Noida, Dwarka, Ghaziabad, Hyderabad and Bengaluru. JioMart — the online grocery venture of RIL — recently said that it has hit a peak of 400,000 orders a day.
Much like grocery, online sales of furniture — especially linked to work-from-home setups — have steadily risen in the last few months. Urban Ladder also has under a dozen offline stores across the country, which accounted for close to a majority of its sales before the lockdown. Urban Ladder, which has raised a total of $115 million, has reportedly also held discussions with companies like Flipkart and FabIndia earlier for a sale.
Source: Economic Times