Zomato has invested about $one hundred million in Grofers. Documents sourced from small business intelligence platform Tofler showed that the Gurgaon-based meals delivery firm has infused about $70 million (Rs 518 crore) into Grofers India and a further $30 million (Rs 223 crore) in the e-grocer’s wholesale entity Hands On Trades.
The investment is understood to have valued Grofers at $1 billion, providing it the status of a unicorn.
The Competition Commission of India (CCI) had last week authorized the deal. “Commission approves proposed acquisition by Zomato of approximately 9.3% stake in Grofers India and Hands on Trades,” the fair trade regulator had stated in a tweet.
According to the filings made by Grofers, the investment is anticipated to give Zomato a 9.16% stake in Grofers India and a 8.94% stake in Hands On Trades. Grofers did not respond to FE’s queries.
Zomato’s investment in Grofers comes at a time when e-grocery services are witnessing heavy demand. The pandemic has nudged more persons to take to on the net grocery buying and analysts think the trend is right here to keep. Industry authorities say that India had an estimated 154 million on the net transacting households as of CY20, with 130 million either currently making use of e-grocery platforms or prepared to attempt.
Tier two cities and beyond will be the next development frontier for the segment players. Following the onset of the pandemic in March last year, Zomato had introduced grocery services on the app but discontinued it right after the meals delivery small business got back in shape.
Zomato is actively seeking at the e-grocery space which the business believes is a “large opportunity”. Last month, executives at the firm had stated that the approach behind the company’s investment in Grofers was to get more exposure to the space and create approach about the e-grocery small business. Zomato is reportedly arranging a bigger investment round in Grofers, amounting to more than $400 million.
Total losses for Grofers improved by more than 40% year-on-year to Rs 637.49 crore in the year to March 31, 2020. Revenue from operations, having said that, grew by a tiny more than 135% y-o-y to Rs 165.27 crore in FY20.