IPO-bound food delivery platform Zomato is set to acquire a 9.3 per cent stake in online grocery firm Grofers. Zomato has sought the approval of the Competition Commission of India (CCI) to acquire the stake. According to media reports, the company is also considering taking an equal stake in Grofers’ wholesale arm Hands on Trade Private Limited.
Zomato, in a filing filed with the CCI, said that the proposed transaction will not have any impact on the competitive landscape in any potentially relevant market in India. As part of the deal, Zomato and existing investor Tiger Global will invest around $120 million in the grocery firm at a valuation of over $1 billion, according to reports.With this investment, Grofers will join the Unicorn Club. Unicorn is a term used to describe privately funded technology startups that have a valuation of one billion dollars or more.
In its presentation to the CCI, Zomato has said that the activities of the two companies have broadly overlapped in India in sectors such as groceries, household goods, general merchandise, personal hygiene and fruits and vegetables. Zomato started a grocery business last year after the lockdown due to Corona across India. However it soon closed vertical down.