Funding Alert

Grofers To Enter The Unicorn Club After Receiving Funding From Zomato,Tiger Global

• ByStartupStory     |    June 30, 2021

Online grocery Grofers to enter the unicorn club after receiving funding from Zomato,Tiger Global. Gurugram-based company, Grofers has signed a deal with Zomato and Tiger Global to raise $120 million in a deal that could value the company at little over $1 billion, sources told us. Zomato is expected to invest around $100 million in Grofers while Tiger Global will put in the rest. ET was the first to report Zomato’s plan to invest in Grofers. Following this investment, Grofers is expected to scrap its IPO plan and remain a private company. The firm was previously eyeing a Nasdaq listing through a SPAC deal with Cantor Fitzgerald’s blank-cheque firm. While grocery is a low-margin business, demand has spiked amid the second wave of the pandemic in India. The Zomato deal may help Grofers scale up its business in a highly competitive sector with large players such as Amazon, BigBasket, Flipkart and Reliance JioMart. Last month, Tata Digital announced its purchase of 64% of BigBasket in one of the biggest M&A deals in India’s digital sector.

Grofers had earlier planned a listing on the tech-heavy Nasdaq in the US through a Cantor Fitzgerald blank-cheque firm, as reported first by ET on Feb. 24. ET subsequently reported that this plan would be scrapped after securing the new round of financing. For Grofers, the latest investment round will help it build a much-needed war chest in a market seeing increased competition and a surge in demand on the back of the Covid-19 second wave. Zomato’s experiment with grocery delivery during the initial months of the pandemic was discontinued, because selling groceries was not its primary focus. “We did grocery through Zomato Market because the food delivery business was negligible during the lockdown. For three-six months, it worked really well and helped us get through the crisis. Eventually, it didn’t make sense,” Deepinder Goyal, co-founder and CEO of Zomato. 

 

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