BENGALURU: Food delivery major, Zomato is likely to buy Grofers in an all stocks deal for nearly USD 750 million , multiple sources privy to the development said. The deal will likely result in the higher valuation for Grofers at a time when the e-groceries sales have picked up substantially during the COVID-19 lockdown.
Japan's tech investment giant, SoftBank may pour in nearly USD 200 million in the merged entity. This will be the second major acquisition by Ant Financial-backed Zomato after it acquired Uber Eats a few months ago to consolidate its food delivery business.
"The deal, if it gets through, will bring together two of the world's leading investors, Soft Bank and Ant Financial which has happened only once when they invested in PayTM," sources said. Grofers had earlier raised USD 220 million from SoftBank, Tiger Global and Sequoia.
Meanwhile, both Swiggy and Zomato have expanded their grocery delivery networks through updated feature on their apps due to partnerships with local kirana stores as well as FMCG majors including HUL, P&G, Godrej, Dabur, Marico, Vishal Mega Mart, Adani Wilmers, Cipla. All the major supermarkets/ grocery shops in a particular locality are enlisted on the updated Swiggy and Zomato app from where the essentials could be ordered.
In addition to food-essentials, both Swiggy and Zomato will now enable orders and deliveries of household items as well as personal hygiene products. Swiggy said that it will also facilitate the pick nad drop of essential commodities like medicines through an updated feature, Genie on its app which is accessible across 15 Indian cities.
Expansion of delivery network
Swiggy announced that it has expanded its delivery network of essential items to over 125 cities across India enabled through partnerships with local kirana stores as well as big consumer brands. Zomato, on the other hand said has run its Zomato Market ( grocery delivery project) in states like Delhi, Kerala, Punjab and will soon expand to Bengaluru, Mumbai.
"Extending our hyperlocal delivery offering will unlock a new dimension of convenience and safety for our consumers as well as earnings for our Delivery Partners during these extraordinary times. As we continue to scale this category, our goal is to provide the necessary support in terms of access to essentials and encourage citizens to stay at home during the lockdown period," Swiggy COO Vivek Sunder said.