India’s largest online grocery startup BigBasket has acquired milk delivery app DailyNinja to consolidate its subscription delivery business. This comes at a time when grocery and micro delivery startups are facing challenges in executing deliveries due to lockdown in most parts of the country over Covid-19.

DailyNinja is the first major acquisition by BigBasket in the micro delivery or subscription commerce space. Last year, the Alibaba-backed firm had taken over Pune-based RainCan and Morning Cart. However, they were more of an acquihire than an acquisition.

DailyNinja, which caters to around 110,000 customers daily with a network of 2,000 milkman partners across India, will augment BigBasket’s reach through its own subscription-based platform bbdaily. BBDaily currently makes about 1,60,000 deliveries per day.

Micro-delivery startup make early-morning deliveries, typically before 7 am, from a select set of grocery items and milk which are ordered before 11 pm the previous night. These items are left at a customer’s doorsteps similar to what traditional milkmen do, without ringing the doorbell on most occasions.

Bengaluru-based DailyNinja was set up in 2015 by Sagar Yarnalkar and Anurag Gupta, and its investors include firms such as NuVentures, Sequoia Capital India, Tracxn Labs, and Saama Capital. In October 2018, DailyNinja acquired Hyderabad-based WakeupBasket in a cash-and-equity deal. It had previously bought Hyderabad-based 4amshop in August that year.

In July last year, venture debt firm Trifecta Capital extended a cheque of Rs 100 crore ($14.5 million) to BigBasket. At the time, the company said it would use the funds to meet its working capital and capital expenditure requirements. BigBasket had previously raised venture debt of $7 million (Rs 45 crore) from Trifecta Capital in March 2017.

In March 2019, the grocery platform raised $150 million (about Rs 1,040 crore) in a fresh round of funding led by South Korean firm Mirae Asset.

Naspers and DST-backed Swiggy, which expanded into grocery via Swiggy Stores, also acquired Suprdaily to enter the subscription commerce space. Last year, Omnivore backed Doodhwala had shut operations and transferred its subscribers to FreshToHome.