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Zomato likely to acquire Grofers in all-stocks deal as grocery war heats up

BENGALURU: Grocery seems to have become the new battlefield for e-commerce companies, with Zomato now keen to acquire e-grocery start-up Grofers in an all-stocks deal valued at $750 million.

The deal, according to various sources, is still in its earlier stage and may pose a serious challenge for Zomato CEO Deepinder Goyal, especially since the merger will bring together two investment giants —Japan’s SoftBank Vision Fund and China’s Alibaba group.

This will be the second major acquisition by Zomato after it acquired UberEats a few months ago to consolidate its food delivery business.

Sources privy to the development said that Zomato’s acquisition offer for another e-grocer, BigBasket, fell through and hence a possible merger with Grofers will help it tap the expanding essential goods market, which has seen an uptick during the lockdown.

Zomato, however, maintained that it is unaware of any such development, adding that Grofers is one of its partners through which it has started grocery delivery on a pilot basis.

“We have partnered with Grofers, along with FMCG companies, local groceries stores and modern retail chains, to pilot our grocery delivery service. We are not aware of any other conversation with Grofers,” a Zomato spokesperson told the TNIE in an emailed statement.

The food tech major earlier announced that under the new feature, Zomato Market, it will deliver essentials to nearly 80 cities across the country.

The development comes after Zomato’s rival Swiggy said that it has expanded its grocery deliveries to over 125 cities through tie-ups with local kirana stores as well as FMCG majors including HUL, P&G, Godrej, Dabur, Marico, Vishal Mega Mart, Adani Wilmers and Cipla. All the major supermarkets and grocery shops in a particular locality are enlisted on the updated Swiggy or Zomato apps, from where the essentials could be ordered.

Digital payments firm PhonePe also said that users can now order essentials from the updated feature stores on the app, which will provide the details of nearby grocery shops, payment options as well as contactless delivery.