RIL may bring Milkbasket, Urban Ladder under its wings

Reliance Industries may buy online furniture brand Urban Ladder and milk delivery platform Milkbasket as the company aims to compete with Amazon and Walmart-owned Flipkart in the e-commerce segment, as per the inside sources.

Reliance is already in talks to acquire e-pharmacy startup Netmeds and lingerie retailer Zivame while its discussions for a possible merger of Future Retail with its retail arm Reliance Retail is still on.

As per news source, discussion with Urban Ladder is now at an advanced stage. RIL may pay around $30 million to buy Urban Ladder, including further infusion in the business and earn-out for the management team. “They have got interest from other players as well and, while the discussions are advanced, a deal has not been finalised yet,” one of the sources said.

Meanwhile, Milkbasket’s earlier talks with firms like Bigbasket and Amazon India did not reach to any conclusion due to valuation mismatch.“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,” a publication quoted an unnamed source as saying.

According to reports earlier, 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. It may be noted that online grocery orders, including daily essentials like milk, bread and eggs have increased since the outbreak of the pandemic. But players like Milkbasket, which focus on daily essentials, are not able to make money as margins are thin in core milk products. Although Milkbasket sells non-milk products to increase its revenue per order, improving unit economics has so far been a challenge in this space, triggering consolidation.