Zomato may buy Grofers in an all-stock deal valuing e-grocer at $750MadminMay 2, 2020
Zomato may buy Grofers in an all-stock deal valuing e-grocer at $750M
In what could possibly emerge as a big consolidation move in India’s consumer internet sector, food delivery and restaurant discovery platform Zomato is learnt to be in talks to acquire online grocery retailing startup Grofers in an all-stock deal, said two people in the know.
Grofers, which has seen heightened demand in the past few weeks on the back of the Covid-19 pandemic, is expected to be valued at around $750 million, these people said. Japanese conglomerate SoftBank Vision Fund, the largest shareholder in Grofers, may look to invest around $100-200 million in the merged entity, sources close to the matter said.
The discussion between the two Gurgaon-based companies comes on the back of a recent partnership that Zomato and Grofers struck for grocery delivery, as reported first by ET. This involved Zomato Market, its newly launched grocery offering, fulfill customer orders from offline stores that have an existing tie-up with Grofers.
If the transaction goes through, it will be the second big buyout by Zomato which acquired the Indian operations of UberEats earlier this year to bolster its food-delivery offering in the domestic market.
The Ant Financial-backed company is currently valued at around $3.2 billion while Grofers was valued at around $650 million, as per its last round of financing led by SoftBank Vision Fund in December last year. Sequoia Capital, the Silicon Valley-based venture capital fund, is a common early investor in the two companies.
“They have been engaged in talks over the past few weeks sensing a big opportunity in the grocery segment. Their pilot run across Delhi NCR seems to have clocked high order numbers to start with, further strengthening the ongoing negotiations,” said a person in the know.