Amazon India is in talks to buy this Blinkit rival
What's the story
Amazon is reportedly in talks with food delivery giant Swiggy for a potential deal involving its quick commerce business, Instamart.
This development comes as Swiggy confidentially filed draft documents with the Securities and Exchange Board of India (SEBI) for a $1.25 billion public offering.
According to the Economic Times, "Amazon has shown interest in either acquiring a stake during the ongoing pre-IPO placement or proposing a buyout for Instamart."
However, no official offer has been made yet.
Deal challenges
Roadblocks and complications in Amazon-Swiggy deal
The potential deal between Amazon and Swiggy faces several roadblocks, according to the report, which cites anonymous sources.
Swift action from Amazon's headquarters in Seattle is required for discussions to advance.
The source also indicated that early talks may not result in a transaction due to the deal's complicated structure.
"Swiggy is unlikely to sell only its quick commerce business, and Amazon isn't interested in the food delivery market where growth is slowing," the ET source said.
Market dynamics
Amazon's quick commerce initiative and Swiggy's valuation
Acquiring the entire company would be too costly for Amazon, given Swiggy's $10-12 billion valuation.
The report also noted that Amazon typically doesn't take minority stakes.
Swiggy is expected to price itself at a substantial discount to rival Zomato, which has a market cap of ₹1.9 lakh crore ($25.6 billion).
Amazon's interest in Instamart aligns with its efforts to develop a quick commerce initiative in India.