Zomato’s $ 100 million investment to turn Grofers into a unicorn

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Indian food delivery giant Zomato, which is working to explore public markets later this year, has struck a deal to invest $ 100 million in online grocer Grofers for around 10% of the startup’s capital of seven. years, according to a source and several others familiar with the subject.

The proposed investment values ​​Grofers, which counts SoftBank as its largest investor, at over $ 1 billion. (The Indian regulator, the Competition Commission of India, must approve the investment.) The investment proposed by Zomato is part of a larger cycle, in which others, including Tiger Global and SoftBank Vision Fund 2, should contribute part of the capital. Zomato said he had no comment.

The management teams at Grofers and Zomato have long been close friends and began exploring this investment earlier this year. Both companies are also open to Zomato acquiring a controlling stake in Grofers in the coming quarters, although a decision has not been made and will not be fully explored until Zomato becomes a listed company. on the stock market, the source told TechCrunch.

Zomato, which acquired the Indian food delivery business from Uber early last year, told some of its major investors that it sees a future where the Gurgaon-based company expands well beyond. beyond the category of food delivery, the source said, requesting anonymity while talks are underway. private.

Grofers operates an online grocery delivery service in India. The startup has seen a surge in popularity over the past year as several Indian states have imposed strict lockdown restrictions to contain the spread of the virus. The startup is in competition with BigBasket, which recently sold its majority stake to Indian conglomerate Tata Group.

The Indian online grocery market has seen a new player emerge over the past year, Reliance Industries, India’s most valuable company. Reliance, which operates India’s largest retail chain, launched JioMart last year.

“JioMart’s growth is testament to its already loyal customer base, 80% of whom are repeat buyers. The goal of JioMart New commerce is to transform and develop the ecosystem of small merchants, so that our merchant partners prosper. Over the past year, more than 300,000 merchant or merchant partners in 150 cities have been empowered and empowered to transform their businesses both physically and digitally, ”said Mukesh Ambani, President of Reliance Industries, earlier this month -this.

In a note to customers earlier this year, analysts at Bank of America estimated that India’s online grocery delivery market could be worth $ 12 billion by 2023.

“Competition is strong in the industry with large verticals like BigBasket / Grofers and horizontals like Amazon / Flipkart trying to convert the unorganized market into an organized market. Until recently, the No.1 player in the space was BigBasket, reaching $ 1 billion in annualized GMV and selling over 300,000 orders every day. Reliance Industries also threw its hat off with the company which launched its JioMart app on May 20 in 200 cities, ”they wrote.


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