Zomato in Talks to Invest about $100 Million in Grocery Delivery Platform Grofers
Zomato that has been in the news over the past few months regarding its impending IPO is currently in talks to invest close to $100 million in e-grocer Grofers. Although an official confirmation has not been made by the food delivery giant, two people in the know of the matter have stated that above. This news comes after discussions for a possible merger fell through between the two firms early last year.
The impending investment is touted to be part of a larger financing round and may bring up the valuation of Grofers to close to $1 Billion.
“Zomato has ambitions in the grocery segment and wants to partner with a specialty grocery company rather than build something of its own. They want to stay focussed on the food business,” a person in the know of the deal said on the condition of anonymity.
Gurugram based Grofers was looking to list on the Nasdaq in the US through a Cantor Fitzgerald blank check firm. But it has been reported that the grocery delivery firm’s IPO plan has been scrapped.
SoftBank Vision Fund (SVF) which holds the largest stake in Grofers ( about 50%), was earlier leading conversations around the firm’s NASDAQ IPO via a special purpose acquisition company (SPAC).
Grofers stated, “We are in regular touch with the investor ecosystem and are seeing a lot of inbound interest given grocery is an essential need and a high growth segment. Given the dynamic business environment, there will always be room for speculation, but our team is focused on serving more families.”
During the initial days of the pandemic last year, Zomato had rolled out its grocery delivery service. It was however discontinued later as the firm believed it was not core to its business. “We did grocery because the food delivery business was gone during the lockdown. For 3-6 months, it worked really well and helped us get through the crisis. Eventually, it didn’t make sense,” said Deepinder Goyal, co-founder, and CEO, Zomato, in a statement.
In its IPO filing, Zomato had stated that acquisitions will be a key strategy for the firm going forward. Although grocery delivery is a low-margin business, yet Zomato’s investment in Grofers could helps the firm scale up in the said vertical. The market already has stiff competition from big players such as Amazon, BigBasket-Tata, Flipkart, and Reliance JioMart.
The impending investment is touted to be part of a larger financing round and may bring up the valuation of Grofers to close to $1 Billion.
“Zomato has ambitions in the grocery segment and wants to partner with a specialty grocery company rather than build something of its own. They want to stay focussed on the food business,” a person in the know of the deal said on the condition of anonymity.
Gurugram based Grofers was looking to list on the Nasdaq in the US through a Cantor Fitzgerald blank check firm. But it has been reported that the grocery delivery firm’s IPO plan has been scrapped.
SoftBank Vision Fund (SVF) which holds the largest stake in Grofers ( about 50%), was earlier leading conversations around the firm’s NASDAQ IPO via a special purpose acquisition company (SPAC).
Grofers stated, “We are in regular touch with the investor ecosystem and are seeing a lot of inbound interest given grocery is an essential need and a high growth segment. Given the dynamic business environment, there will always be room for speculation, but our team is focused on serving more families.”
During the initial days of the pandemic last year, Zomato had rolled out its grocery delivery service. It was however discontinued later as the firm believed it was not core to its business. “We did grocery because the food delivery business was gone during the lockdown. For 3-6 months, it worked really well and helped us get through the crisis. Eventually, it didn’t make sense,” said Deepinder Goyal, co-founder, and CEO, Zomato, in a statement.
In its IPO filing, Zomato had stated that acquisitions will be a key strategy for the firm going forward. Although grocery delivery is a low-margin business, yet Zomato’s investment in Grofers could helps the firm scale up in the said vertical. The market already has stiff competition from big players such as Amazon, BigBasket-Tata, Flipkart, and Reliance JioMart.
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