After UberEats, Zomato is eyeing to buy Grofers
What's the story
A few months after acquiring UberEats, Zomato is looking to buy popular e-grocery start-up Grofers. The food delivery company is reportedly in talks with the SoftBank-backed start-up for an all-stock deal. The report comes at a time when the demand for home delivery of groceries and daily essentials is sky-rocketing due to the COVID-19 lockdown across India. Here's all about it.
Report
Deal valuing Grofers at $750 million
According to sources cited in two separate reports, one from Entrackr and other from Economic Times, Zomato is in early talks to acquire Grofers in a deal that might value the latter at around $750 million. The discussions, these people say, are at the founder and company level right now and might move to the board level if all goes well.
Investment
SoftBank might invest in the merged entity
The sources speaking to ET further noted that SoftBank, the main investor of Grofers, might infuse an additional $100-200 million in the merged Zomato-Grofers entity through its venture capital arm 'Vision Fund'. Notably, Zomato and Grofers have already partnered for Zomato Market, a service that allows the company to deliver groceries and daily essentials from local stores that have tie-ups with Grofers.
Comments
No official word on the deal yet
As of now, there is no official word on the possibility of a Zomato-Grofers merger. Saurabh Kumar, the founder of Grofers, tweeted, "Despite what sources say, the only discussion we are having @Grofers is how to scale our supply chain to serve the unprecedented demand...We have a responsibility to our customers and country at this time and our teams are 100% focused on that."
Quote
Zomato and SoftBank also had similar answers
A Zomato spokesperson said, "We have partnered with Grofers, along with FMCG companies, local groceries stores, and retail chains, to pilot our grocery delivery service. We are not aware of any other conversation with Grofers," while SoftBank said that they cannot comment on the speculation.
Possibility
Grofers's acquisition could certainly upgrade Zomato's arsenal
If the deal goes through (now or later), Zomato would get a major push to take on the likes of Swiggy, which has been boosting its grocery delivery segment lately, as well as other players already operating or stepping into the delivery of essential goods. This includes Grofers's long-standing competition BigBasket and e-commerce giants Flipkart and Amazon India.