RIL in Talks to Acquire Urban Ladder & Milkbasket

Reliance Industries Limited (RIL) is in talks to acquire online furniture brand Urban Ladder and milk delivery platform Milkbasket in order to boost its e-Commerce business. This comes at a time when the Chairman & MD of RIL – Mukesh Ambani was also discussing about acquiring players like e-Pharmacy startup Netmeds and lingerie retailer Zivame,e ven as it scripts consolidation with Future Retail.

Since last few months, discussions with Urban Ladder have been going on and are now at an advanced stage. 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. “They have got interest from other players as well and, while the discussions are advanced, a deal has not been finalised yet,” says another source.

Milkbasket’s previous talks with firms like Bigbasket and Amazon India haven’t fructified 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,” says this person.

As reported by TOI in March, Bigbasket held talks with Milkbasket, looking at a valuation of under $15 million. Bigbasket has also acquired DailyNinja to boost its subscription-based morning delivery business BB Daily.

Milkbasket is negotiating for a better valuation than previous suitors and is thus in discussions with RIL. The recent capital infusion of $5 million has bought them extra time

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,” says Ashish Goel, Co-Founder, Urban Ladder. Ashish adds, “The company is working round-the-clock to rejuvenate the business”. “As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis,” says an RIL spokesperson, 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.

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.