In what would potentially become the million-dollar move in India's consumer online delivery, food delivery company Zomato is considering in talks to buy SoftBank-backed online grocery startup Grofers. The demand for e-grofers has seen a spike in the past few weeks due to coronavirus lockdown in India.
According to Economic Times reports, Grofers is expected to be valued at around $750 million (around Rs 5,700 crore). Japanese conglomerate SoftBank, the largest shareholder in Grofers, may look to invest around $100-200 million in the merged entity through venture capital arm Vision Fund, reports added.
Recently, SoftBank also invested in Uber. In February, Uber sold its India food delivery business UberEats to Zomato.
The deal talks come soon after Zomato and Grofers announced a partnership to deliver essential items during the nationwide lockdown, which has now been extended to May 3. Zomato Market was launched around the country amid the lockdown.
The two Gurugram-based companies have been in talks for the past few weeks, a source told The Economic Times.
"Their pilot run across Delhi NCR seems to have clocked high order numbers to start with, further strengthening the ongoing negotiations," the source added.
"We have partnered with Grofers, along with FMCG companies, local grocery stores, and modern retail chains, to pilot our grocery delivery service. We are not aware of any other conversation with Grofers," a Zomato spokesperson told the newspaper.
One of the most valued startups in India, Zomato has a valuation of about $3.2 billion. Grofers, which counts the likes of Alibaba-backed BigBasket among its rivals, is valued at $650 million. Currently, Zomato and Swiggy have consolidated the Indian food delivery market.