Amazon In Talks With Swiggy To Acquire Instamart: Report
Amazon India has approached IPO-bound Swiggy for a potential deal about Instamart, its quick commerce business, as per the Economic Times. Notably, Swiggy recently filed draft documents with Sebi for a Rs 10,414 crore, or $1.25 billion, public offering. The amount is the largest for a new-age internet company.
According to the report, although there is no official offer on the table as of yet, Amazon’s headquarters in Seattle must move quickly for a potential deal. The discussions, which are currently in their early stages, are likely not to lead to a transaction because of the complex structure of the deal, as per the report.
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“Swiggy is unlikely to sell only its quick commerce business, and Amazon won’t be interested in the food delivery space where growth is starting to plateau,” said the report, quoting sources familiar with the matter.
Swiggy is expected to price itself at a substantial discount to rival Zomato. The latter’s market cap was Rs 1.9 lakh crore on Friday on the BSE. Reportedly, Amazon’s India team has been operating on its own quick commerce initiative for a few months now; however, to launch a separate vertical for swift deliveries will require global clearance.
On June 25, last year, Flipkart also reportedly explored a similar discussion with the Bengaluru-based Swiggy. However, the talks fell through following a mismatch in valuation.
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In its annual report for 2023, Prosus, Swiggy’s investor, stated that Instamart witnessed improved unit economics due to “larger basket sizes, expanded user base, and improved operational efficiency,” as per the Economic Times.
Ecommerce firms have been seeking to boost their quick commerce play as the sector undergoes exponential growth, even challenging online firms such as Amazon and Flipkart. The three leading platforms in this regard are Swiggy’s Instamart, independent platform Zepto, and Zomato’s Blinkit.
