As the Covid-19 pandemic upends most aspects of modern life such as eating out and ordering takeout, startups operating in the consumer internet space are weighing other options to stay relevant.
Zomato may snap up Grofers
The food delivery and restaurant discovery app is said to be in talks to acquire Grofers in an all-stock deal. That’s hardly a surprise as the nationwide lockdown to tackle the virus outbreak saw an unprecedented spike in demand for online groceries.
$750 million
That’s the expected valuation of the e-grocer. Grofers was valued at around $650 million as per its last round of financing led by SoftBank Vision Fund in December last year.
Ubiquitous SoftBank
SoftBank Vision Fund, the largest shareholder in Grofers, may also look to invest around $100-200 million in the merged entity. The Japanese conglomerate is also an investor in Uber. Interestingly, Uber sold its India food delivery business UberEats to Zomato in February. Read more.
But all’s not well
Founder Masayoshi Son has pledged additional shares in his telecoms-to-internet giant, taking it to about 60%, as collateral against personal loans in March, the Financial Times reported.
Son, who directly holds 462 million shares in SoftBank, now has pledged as much as 280 million of it as of March 19, as per an analysis of securities filings conducted by the newspaper. As of March 27, Son’s net worth was estimated at $12 billion, excluding the value of his pledged shares, as per Bloomberg, falling $3.6 billion so far this year.
It comes at a time when SoftBank is struggling to raise new capital for the second edition of the $100 billion Vision Fund amid a bunch of its portfolio startups struggling to survive since the WeWork debacle last year. Read more.
Grocery FOMO
Swiggy has expanded its grocery and household essential services to over 125 cities after partnering with fast moving consumer goods brands including Hindustan Unilever, Procter & Gamble, Godrej, Dabur, Marico, Adani Wilmar and brick-and-mortar retailer Vishal Mega Mart.
At your doorstep
The Naspers-backed firm has also expanded its concierge service ‘Genie’ to over 15 cities. The service, however, is limited to delivering essentials including over-the-counter medicines during the lockdown period. Read more.
Gaja Capital’s new bet
Sachin Bansal-led financial services holding company Navi Technologies has scooped up an additional Rs 204 crore from the mid-market private equity firm.
The latest private placement follows a fundraising of over Rs 3,000 crore by the company that was led by Bansal and other investors earlier this month. It is, however, yet unclear if Gaja Capital’s investment in Navi Technologies is part of the same preferential allotment.
Navi Technologies has emerged as the holding company for Bansal, after his departure from Flipkart in 2018, through which he has continued to place large bets on India’s broader financial services segment, which includes microlending, general insurance and mutual funds, among others. Its microfinance arm Chaitanya India Fin Credit had also applied for a universal banking license to the Reserve Bank of India earlier this year. Read more.
Lockdown changes shopping habits
Office hours are turning into shopping hours, especially for essentials, data shared by companies managing online and offline transactions show. And that weekend spending bulge too has somewhat flattened, with those working from home managing their routines differently.
By the numbers
- Nearly 70% of all grocery shopping in the fourth week of March at over 3,000 stores happened between the usual working hours of 10 am to 7pm, up from 57% in the first week of February, according to point-of-sale service provider Innoviti.
- Only 9% of spends were made after 7 pm in March compared to around 37% in February.
- And while weekend spends at these stores used to be between 150% and 180% of weekday spends before the lockdown, the difference has come down to 75-100%. Read more.
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