Zomato Ltd, on July 8, confirmed its $100 million investment in Grofers to build the strategy around grocery. The food delivery startup will soon launch a grocery section on its app, it told CNBC-TV18.
“Online grocery is a large opportunity in India,” Zomato Ltd, which is backed by Jack Ma's Ant Group, said.
The food delivery platform, however, clarified that they don’t have anything defined on Grofers in terms of a full buy-out.
The announcement comes days ahead of the launch of Zomato’s initial public offering (IPO) on July 14. The offer will close on July 16 and will be the largest after the SBI Cards and Payments System’s offer worth Rs 10,355 crore launched in March 2020.
Speaking about the IPO, Zomato said, “We thought it was good time to go public. We are an Indian homegrown brand, we have customer love here, made sense to go for IPO in India.”
Gaurav Gupta, the co-founder of the food delivery giant, said they will invest more in customer acquisition. “Customer love should help a little bit in terms of retail participation,” he said.
Zomato said its post-money valuation at the upper band will be Rs 64,365 crore. Gupta said, “The valuation is always about what the current strength of the business is and what the future potential of the business could be.”
He hailed the benchmarks for internet companies that are building out growth businesses for the future. “I am sure people have triangulated that to see what seems to be the right value for Zomato,” he said.
Going forward, Zomato’s growth drivers will be both organic and inorganic as Gupta says they’re not hell-bent on any particular channel of growth and would want to do whatever makes sense.
“We will continue to optimize both for growth and to better our economics as we go along like we have done in the last two-three years,” Gupta said.