Grofers to turn Unicorn with Zomato Funds

new financing will value the startup at a little over USD 1 billion, putting it in a growing pool of Indian Unicorns

Grofers to turn Unicorn with Zomato Funds

Grofers, an e-grocers has signed a deal with Zomato and Tiger Global to raise USD 120 million. The new financing will value the startup at a little over USD 1 billion, putting it in a growing pool of Indian Unicorns. According to some sources, Zomato which is likely to launch its IPO next month is expected to file a proposal with the competition Commission of India (CCI) this week, looking for approval for the investment.

In the current round of funding, Zomato will invest about USD 100 million in Grofers, while the existing investor Tiger Global will put in the rest. New York-based Tiger is an investor in both companies, while SoftBank Vision Fund owns about 50% of Grofers. The development comes as Zomato’s rival Swiggy is aggressively pushing daily essentials delivery through Supr Daily and quick grocery delivery service Instamart. Moreover, SoftBank Vision Fund is close to deploying USD 450 million in Swiggy, largely to help it expand beyond food delivery. Zomato’s experiment with grocery delivery during the initial months of the pandemic was discontinued as it was not a core business.
 

The company had stated in its IPO filing that acquisitions will be a key strategy. While grocery is a low-margin business, Zomato’s investment in Grofers may help it scale the vertical quickly by combining forces in a highly competitive sector that has incumbents with deep pockets such as Amazon, BigBasket-Tata, Flipkart, and Reliance JioMart.