In what would potentially become the million-dollar move to consolidate the online delivery space in India, food delivery and restaurant discovery platform Zomato is reportedly in talks with e-grocer Grofers for a merger. The demand for Grofers has seen a spike in the past few weeks as India went into a lockdown to fight the coronavirus pandemic.
While various reports say that the discussions are still in preliminary stages and a deal may or may not happen, what captures the popular imagination is that Zomato recently partnered with Grofers as the former forayed into the grocery delivery space last month. Zomato Market was launched around the country amid the lockdown.
According to online portal Entrackr, the talks are at the company and founder level at the moment. If the deal goes through, then it will be the second major acquisition by Zomato this year. In January, Zomato had acquired ride-hailing startup Uber's food delivery arm, Uber Eats.
The Grofers deal will also help Zomato to reassert its market position against rival Swiggy in the food delivery space in the country. Currently, Zomato and Swiggy have consolidated the Indian food delivery market.
The investors in Grofers include the likes of Japanese tech fund SoftBank and Tiger Global, while Zomato is backed by Ant Financial. 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. Silicon Valley-based venture capital fund, Sequoia Capital, is a common early investor in both Zomato and Grofers.
