DailyNinja Delivery Services Pvt. Ltd, which operates grocery delivery platform DailyNinja and its parent Supermarket Grocery Supplies Pvt. Ltd., which operates BigBasket have been served a ₹231 crore notice by Town Essentials Pvt. Ltd, for not honoring an existing contract.
DailyNinja was acquired by BigBasket in March 2020.
In October 2017, Bengaluru-based grocery platform Town Essential had signed a contract with DailyNinja to be its exclusive backend supplier and procurement partner. The contract had remained valid after the acquisition.
DailyNinja, however, claimed that it will have to raise its billings with BigBasket, as it systematically moves its customers to BBDaily, the e-grocer’s daily subscription service.
Town Essentials has claimed losses, asking BigBasket and DailyNinja to pay ₹6 crore for “lawful termination of the contract”, ₹200 crore for “wrongful loss of growth opportunity”, and ₹25 crore for “harassment” and “cheating” perpetuated, according to the notice.
Tata Group is in talks to acquire a majority stake in BigBasket, valuing the e-grocer at $1.6 billion.
The notice is also addressed to previous investors of DailyNinja including Sequoia Capital India, Matrix Partners India, and Saama Capital, along with co-founder of BigBasket Hari Menon and co-founders of DailyNinja, Sagar Yarnalkar, and Anurag Gupta.
Mint has reviewed a copy of the notice.
The breach of contract has led to Town Essentials to lose critical business, driving its operations into losses, it said.
Due to the losses, Town Essentials had to sell its infrastructure and customers to Greens Towness Pvt. Ltd., a subsidiary of Greens Foodcraft India Pvt Ltd, a Bengaluru-based agriculture food company, in December, according to an official spokesperson of Town Essentials.
“The ongoing contract with Daily Ninja, stated that Town Essentials will be an exclusive partner to Daily Ninja until it delivers a certain volume of business to us. During the transition of the acquisition and the lockdown when supply chain was disrupted, DailyNinja continued to leverage our logistics strength and has ever since been systematically cutting us off with no proactive intimation that BigBasket has been onboarded as new supply partners,” said the Town Essentials spokesperson.
“We have been kept in the dark on the matter,” the spokesperson added.
Spokespeople of DailyNinja, Sequoia Capital and Matrix Partners declined to comment. BigBasket’s Menon didn’t respond to an email and calls.
“We were clear that as soon as the Daily Ninja acquisition was complete, all supplies would be from Bigbasket and Daily Ninja would become part of our BB Daily ecosystem. And this cannot change” and further that “It wouldn’t be possible to restore the business. It’s now an integrated business and this was the plan […] My suggestion would be that you get in touch with the DN (Daily Ninja’s) investors on this issue,” BigBasket had said in an e-mail response to Town Essentials, when the matter was escalated, in November and December, last year according to the notice.
Town Essentials is keen to go through an arbitration process to settle the dispute, the spokesperson said.
BigBasket saw its losses widen by 26% to ₹709 crore in 2019-20 from ₹562 crore in the previous fiscal. In addition, the company’s revenues grew to ₹3,818 crore in FY20 from ₹2,802 crore in FY19, and expenses jumped 31% to ₹4,411 crore from ₹3,365 crore during the period, Mint reported last week.