Monday, March, 20, 2023 09:50:24

Indian food delivery company Zomato has reportedly agreed to invest USD 100 million in Grofers, an online grocery platform, for an approximate 10% stake in the startup.

This investment takes the valuation of Grofers at over USD 1 billion. However, the Competition Commission of India is yet to approve this investment. The investment is part of a bigger funding round and other firms like SoftBank Vision Fund 2 and Tiger Global will contribute some capital.

The leadership teams at Zomato and Grofers have long had a close friendship and have been considering this investment since early 2021. In addition, both companies have mutually agreed to the idea of Zomato obtaining a majority stake in Grofers over upcoming quarters. However, they have not yet reached a final decision and will not explore this deal until Zomato goes public.

Zomato, which previously acquired the Indian food delivery business of Uber last year, has supposedly informed its major investors that it visualizes a future beyond the food delivery sector.

Grofers is a seven-year-old online grocery delivery service provider in India. Over the past year, the startup witnessed a significant rise in its popularity owing to many Indian states enforcing strict lockdown restrictions. The biggest competitor for Grofers is BigBasket, whose majority stake was recently bought by the Tata Group.

Last year, the online grocery market in India witnessed a new player in the form of Reliance Industries, the most valuable company in India. Reliance, the operator of the largest retail chain in India, launched JioMart last year.

Mukesh Ambani, Chairman of Reliance Industries, reportedly commented that the resounding success of JioMart showcases its loyal consumer base as 80% of the consumers were repeat shoppers. The company also launched its JioMart app across 200 cities on May 20.

As per reports, the number one firm in the online grocery delivery sector was BigBasket with around 300,000 daily order placements and an annual GMV hitting USD 1 billion.

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