As the nation has been kept under lockdown, people have shifted to buy their grocery and essential products online thus the food delivery and restaurant business Zomato is now eyeing on Grofers in a bid to consolidate its position in the grocery delivery space.
According to reports, the Gurugram-based food-tech unicorn Zomato is looking to acquire Gurugram-based Grofers in an all-stock deal. For this deal, Grofers would be valued at around $750 million.
The deal comes due to the coronavirus pandemic, which has put grocery and essentials delivery at the forefront of all retail.
As per a report in The Economic Times, the discussion comes on the back of a recent partnership between the Zomato market- a recently launched grocery offering, fulfill customer orders from offline stores – and Grofers for grocery delivery.
If the deal closes it would become the second big buyout made by Zomato after its acquisition of UberEats in 2017, BigBasket and Grofers had explored a potential merger while Amazon had held talks to acquire BigBasket but the discussions did not fructify into a deal.
Zomato wants to leverage its last-mile expertise in delivery while taking advantage of a wide range of private labels that Grofers manufactures.
While the margins in the grocery business are low, and added capital infusion from SoftBank will give both the companies ammunition to fight BigBasket which is backed by Alibaba, Swiggy and the likes of Amazon and Flipkart in the future. Zomato’s lead investor is Ant Financial, an affiliate of Alibaba.