Food delivery app, Zomato is in discussions with Grofers to invest about $100 Million in the Gurugram-based e-grocery platform. The investment comes after the talks of a potential merger came through last year, with the start of the Covid-19 pandemic.
Zomato’s investment is expected to be part of a bigger financing round and can take the valuation of the e-grocery platform to around $1 billion. This time, the talks were focused on capital infusion, unlike in 2020 when Zomato was planning to take over Grofers completely in an all-stock deal.
Grofers was planning to list itself on the US-based Nasdaq through a Cantor Fitzgerald blank check firm. But, it is now expected that they will dismiss the IPO plan and proceed to remain privately owned.
The largest shareholder in Grofers with an around 50% stake continues to be SoftBank Vision Fund (SVF), which was previously driving the discussion around its initial public offering through a Special Purpose Acquisition Company (SPAC).
Zomato’s investment in Grofers comes at a time when SoftBank is planning to invest $450 million in Swiggy, its chief rival. Swiggy has been promoting “Instamart”, its swift grocery delivery service, and “Supr Daily”, an essentials delivery platform to diversify from restaurant to home delivery.
Zomato tested grocery delivery during the initial months of the lockdown under “Zomato Market”, but suspended its services saying it was not cored to its primary business model.
Recently, Zomato filed its IPO prospectus with the market regulator, SEBI, expecting to raise more than $1 billion via a mix of the sale of existing shares and fresh equity.
Grocery delivery services like Grofers have become vital since the onset of the pandemic. The company has had an amazing growth trajectory in the past and seems to grow even more in the coming years.Shishir Gupta, Founder and CEO, StartupLanes
If you are an emerging startup and are looking for investors to raise funds, StartupLanes has its own angel network and investment banking services and is connected to angel investors and VCs in 15 countries that ensure that our member startups have easy access to external funds to scale up constantly.
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