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Zomato, a restaurant discovery, and food-delivery platform has sought approval from the Competition Commission of India (CCI) for its proposed investment in e-grocer Grofers.
“The notification form is being filed in relation to the proposed acquisition by Zomato of approximately 9.3% stake in each of Grofers India and HoT (Hands on Trades Private Ltd) along with certain rights in each of the Targets (Proposed Transaction),” Zomato said in its filing with the CCI.
“The proposed transaction will have no impact on the competitive landscape in any potential relevant market in India, in any manner,” the filing added.
According to Zomato, the transaction will have no effect on the competitive landscape. The IPO-bound company notified the Competition Commission of India of its intention to acquire a 9.3 percent stake in Grofers.
According to reports, the investment is expected to value Grofers at around $1 billion, elevating it to the status of a unicorn. As Zomato and Tiger Global would invest approximately $120 million in Grofers, with Zomato bringing in the lion's share of the capital.
Grofers co-founder and CEO Albinder Dhindsa stated in a recent company blog that the company's "next funding round is secure."
This fundraising came at a time when e-grocery services have been witnessing a heavy demand. The pandemic pushed more people to shop for groceries online, and analysts believe the trend will continue. According to industry experts, India had an estimated 154 million online transacting households in CY20, with 130 million either using or willing to try e-grocery platforms.
It is expected to provide Grofers with much-needed assistance in combating ever-increasing competition. Since the company's total losses increased by more than 40% year on year to Rs 637.49 crore in the fiscal year ending March 31, 2020. The company's expenses increased, rising to Rs 814.29 crore in FY20 from Rs 531.62 crore in FY19. Revenue from operations, on the other hand, increased by slightly more than 135 percent year on year to Rs 165.27 crore in FY20.
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