BigBasket, India’s largest online grocery retailer, is raising $280 million from investors. While existing investors Sands Capital and The Abraaj Group are putting in $80 million, the remaining $200 million is coming from new investors Paytm Mall* and China’s Alibaba Group. The $200 million also includes a ‘secondary’ buyout of some of BigBasket’s existing shareholders. As a result, BigBasket’s ‘post money’ valuation will now range between $800-900 million, placing it within striking distance of the coveted ‘unicorn’ tag. Though the deal has been signed off by all the parties involved, a formal announcement and signed agreement might take another fortnight to emerge.

News of this deal was first reported by The Economic Times on August 29th.

According to multiple people with knowledge of BigBasket’s finances, the grocery company had just about two months of runway left on the books, which meant it had to pick the best deal. And fast.

The company had been looking to raise funds since 2016 but had not been able to generate enough interest to close the round. It had approached investors in China, US and even Amazon India. Nothing stuck. Until Paytm and Alibaba.

BigBasket’s current round from Paytm Mall (the company separated its payments and e-commerce business into two units in February this year) and Alibaba values the grocery retailer at twice its valuation from 2016. BigBasket cut it close but it can be argued that it was worth the wait as its founders get to continue to run the company independently.

Let’s take stock of grocery companies in India: Amazon, SoftBank-backed Grofers, BigBasket (through Paytm), ZopNow and Flipkart. And they are all ready to battle it out to get a piece of a market, which will be valued at $1.2 trillion by 2020. According to analysts tracking the sector, a very small percentage is organised. There is a lot of juice in this market.

But grocery is a difficult category to build. And there have been several well-funded casualties. LocalBanya in Mumbai collapsed in 2015, PepperTap in Delhi NCR had to shut shop in 2016 and BigBasket, which claims to have 5 million customers, almost had to call it a day. Founded in 2011, it has taken BigBasket seven long years to expand to multiple cities and build a strong supply chain for its private label play and fresh fruits and vegetables.

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“People underestimate grocery. E-grocery is more about grocery and less about the ‘e’ part of it. You have to be a grocer first. The team including Hari (Menon) have run the Trinethra chain of supermarkets, they know how to build the supply chain,” says K Ganesh, co-promoter at BigBasket.