Zomato plans to invest $100 million in Grofers as e-grocer

Food delivery startup Zomato may invest $100 million in e-grocer Grofers after talks of a merger between the two companies fell through last year.

Maintaining focus on the food business, Zomato wants to expand into the grocery segment through a specialised company instead of building it by itself.

Media reports earlier suggested that Grofers was in discussions for a listing on the NASDAQ through a merger with Cantor Fitzgerald's special purpose acquisition company (SPAC).

The Indian grocery startup now reportedly plans to scrap the listing plans. Zomato's investment in Grofers is expected to value the grocery firm at $1 billion.

Zomato had stepped into the grocery delivery business in the initial months of the COVID-19 pandemic but scrapped it, saying that it was not its core business.

Zomato has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on April 28. According to the DRHP, the company will offer equity shares aggregating up to Rs 8,250 crore (nearly $1.1 Billion). Of this, Rs 7,500 crore will be fresh issue, while Rs 750 crore will be an offer for sale for its existing investor Info Edge.