Reliance could buy Milkbasket, Urban Ladder in e-commerce push
As Amazon and Flipkart continue to take long strides in the Indian e-commerce segment, Mukesh Ambani's Reliance Industries is also looking to grow its online footprint. According to a report in The Times of India, the conglomerate is mulling bringing two popular e-commerce start-ups under its umbrella - Urban Ladder and Milkbasket. Here's all you need to know about it.
Talks to acquire the companies underway
Reliance Industries, which owns Reliance Retail and its online, offline shopping businesses, has reportedly begun talks to acquire Urban Ladder, an online furniture seller, and e-grocer Milkbasket. The discussions with Urban Ladder started a few months ago and have already moved to an advanced stage, while the talks with Milkbasket are still at an early stage, people directly familiar with the matter told TOI.
Urban Ladder could be sold at around $30 million
The deal with Urban Ladder could be finalized for about $30 million, including further infusion and earn-out for the management. However, it must be noted that the talks have not been completed, and could fall apart. "They have interest from other players as well and, while the discussions are advanced, a deal has not been finalized yet," one person clarified.
And, Milkbasket looking for a better valuation from Reliance
Meanwhile, Milkbasket has held acquisition talks with Amazon India and BigBasket but the deal did not go through as the company expected a better valuation than what they offered. "They are negotiating for a better valuation than previous suitors and are thus in discussions with RIL," a TOI source said, adding that Milkbasket's "recent capital infusion of $5 million has bought them extra time."
BigBasket pegged Milkbasket's valuation at under $15 million
In fact, according to some reports, BigBasket had valued MilkBasket at something under $15 million when the companies were in talks for a potential acquisition in March.
No official word from any of the parties
On their part, neither Urban Ladder nor Milkbasket has confirmed on the possibility of a deal with Reliance. Urban Ladder's co-founder said, "It would not be productive to comment on media speculations." Separately, Reliance's spokesperson emphasized, "We do not comment on media speculation and rumors. Our company evaluates various opportunities on an ongoing basis...and will make the necessary disclosures to stock exchanges."
A deal would be critical for Reliance's e-commerce play
However, a deal with the two companies could give Reliance's e-commerce play a major push. The company's online store, JioMart, deliveres groceries and essentials to 200 Indian cities and has already announced plans to expand to more categories. As such, Milkbasket's well-established network serving fruits, vegetables, dairy, and baked goods and Urban Ladder's furniture business could be an ideal addition to the platform.