In a strategic move to further strengthen its presence in the e-commerce and logistics space, Zomato, led by CEO Deepinder Goyal, has expressed interest in acquiring e-commerce shipping startup Shiprocket. While no final agreement has been reached, Zomato has proposed a substantial $2 billion deal to acquire Shiprocket, a move that aligns with Zomato’s broader strategy to diversify its offerings beyond food delivery.

Zomato’s Multi-Billion Offer

Zomato, a major player in the food delivery sector, has put forth a proposal to acquire Shiprocket, an e-commerce shipping startup. The proposed deal, estimated at $2 billion, signifies Zomato’s eagerness to expand its footprint in the rapidly evolving landscape of e-commerce logistics. Zomato is already an investor in Shiprocket, and this potential acquisition underscores the growing synergy between the two entities.

Shiprocket, backed by notable investors including Info Edge, Temasek, and Lightrock, reported impressive financial performance in the fiscal year ending on March 31, 2023. The logistics startup recorded a remarkable 78% increase in operating revenue, amounting to approximately Rs 1,089 crore. However, its net loss widened by 3.6X to Rs 341 crore, primarily attributed to multiple acquisitions made by the company.

Shiprocket’s Expansion Plans and Financial Support

Despite the widened net loss, Shiprocket has been actively expanding its offerings. The startup recently announced plans to disburse around Rs 100 crore to small and medium businesses (SMBs) through its financing platform. In its pilot phase, Shiprocket Capital has already facilitated access to growth capital for around 150 SMBs, with plans to disburse the targeted amount by December 2024.

Zomato’s foray into the quick commerce space with Blinkit has yielded positive results. CLSA, a foreign brokerage firm, identified Zomato as its top pick in the consumer space, citing the viability of quick commerce across cities in India, beyond metros and tier-1 cities. Blinkit, Zomato’s quick commerce platform, achieved positive contribution in Q2 FY24, showcasing the success of its expansion strategy.

CLSA’s Perspective on Zomato

CLSA’s sector note highlighted Zomato’s strong position in the consumer space, emphasizing the potential of quick commerce across diverse geographies. The brokerage noted that Zomato’s Blinkit achieved a positive contribution in Q2 FY24, with added scale and expanded city reach expected to drive positive adjusted EBITDA in FY25. CLSA also compared Blinkit’s pricing against competitors, highlighting its 23% discount to maximum retail price (MRP) and positive performance in the quick commerce sector.

Zomato’s pursuit of Shiprocket follows its acquisition of Blinkit (formerly Grofers) in August 2022. The acquisition included Blinkit’s warehousing and ancillary services business, marking a significant move beyond Zomato’s core food delivery services. The deal, valued at Rs 4,447 crore, positioned Zomato to diversify its portfolio and tap into the growing demand for quick commerce and logistics solutions. Zomato’s potential $2 billion acquisition of Shiprocket signals a strategic evolution in the company’s business portfolio. With a focus on expanding its reach in e-commerce logistics and quick commerce, Zomato is aligning itself with the evolving demands of consumers and businesses alike. The proposed deal, if finalized, could further solidify Zomato’s position as a key player in India’s dynamic and rapidly growing e-commerce and logistics sectors.

By Admin

Leave a Reply

Your email address will not be published. Required fields are marked *