Food Delivery Startup Zomato to acquire 9.3 percent stake in Grofers


Food Delivery Startup Zomato to acquire 9.3 percent stake in Grofers

Zomato, a restaurant discovery and food-delivery platform, has applied to India's anti-monopoly watchdog for permission to invest in e-grocer Grofers. The IPO-bound company notified the Competition Commission of India of its intention to acquire a 9.3 percent stake in Grofers. According to the CCI document, Zomato has stated that the transaction will have no effect on the competitive landscape.

There are also major players on the horizon who will deliver meals as well as groceries. Amazon already has a successful grocery delivery service and is currently testing a food delivery service in Bangalore, while the Tata Group recently acquired Big Basket and may integrate food delivery into its app.

Earlier Grofers has closed a $120 million investment from Zomato and Tiger Global, valuing the company at slightly more than $1 billion, solidifying its place in the growing pool of unicorns. Tiger GlobaL is a joint investor in both companies.

The news comes as Zomato's competitor Swiggy aggressively promotes daily essentials delivery via Supr Daily and quick grocery delivery service Instamart. Swiggy is on the verge of receiving $450 million from SoftBank Vision Fund, primarily to help it expand beyond food delivery.

To add to the competition, Tata Group acquired a majority stake in BigBasket and invested an additional $200 million in primary capital. Horizontal e-tailers like Amazon and Walmart-owned Flipkart are also expanding their grocery offerings as consumers increasingly shop online for necessities.

According to the source, Zomato, which recently acquired Uber's Indian food delivery business early last year, has told several of its major investors that it sees the company expanding far beyond the food delivery segment.