3 Reasons Why Zomato Will Invest Rs 2300 Crore In Grofers (#3 Is About Zomato IPO)

3 Reasons Why Zomato Will Invest Rs 2300 Crore In Grofers (#3 Is About Zomato IPO)
3 Reasons Why Zomato Will Invest Rs 2300 Crore In Grofers (#3 Is About Zomato IPO)

Zomato is eyeing Grofers, one of the leading grocery delivery companies, and to acquire the latter, Zomato is planning to invest as much as $300 million!

Let’s find out three reasons why Zomato will invest such a huge sum in grocery delivery!

Three Reasons Why Zomato Will Invest rs. 2300 Crores In Grofers

#1: Zomato’s ReEntry Into Online Grocery Delivery

This is not the first time that Zomato has ventured into the grocery delivery vertical. Last year, Zomato’s plans of teaming up with the same Grofers were in the news. In an attempt to revive the business that was slowly sinking due to the COVID-19 pandemic and the lockdown, the popular online food delivery platform has chosen to go the grocery way. This venture was to be called Zomato Market and there were discussions with e-grocers to sell food products and other such essentials by providing for their deliveries.

However, this effort was not effective in winning hearts. By acquiring Grofers, looks like Zomato still hasn’t given up its hopes in the online grocery delivery vertical.

#2: Boost for Zomato’s Own HyperPure Brand for Grocery Delivery

HyperPure is Zomato’s B2B food tech vertical, which was acquired by the Goyal-led company in 2018. In the financial year 2020, HyperPure had reportedly recorded eight times growth in revenue from $1.8 Mn in FY19 to $14.7 Mn in FY20.

By acquiring Grofers, Zomato plans to give a boost to HyperPure, which is used by more than 2280 restaurants. 

#3: Zomato IPO

Zomato has recently announced its plans to file for an Initial Public Offering (IPO) with the aim to raise about $650 million.

In February, Zomato raised an additional $250 million from existing and new investors. The primary pre-IPO fundraise was completed at a total valuation of $5.4 billion, which is an impressive increase from $3.9 billion in December.

In the company’s Draft Red Herring Prospectus (DRHP) it said, “We will from time to time continue to seek attractive inorganic opportunities that we believe will fit well with our strategic business objectives and growth strategies.” 

The acquisition of Grofers for $300 million might be one such “attractive inorganic opportunity.” 

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