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Online food delivery firm <keyword id="19901323" type="General" weightage="20" keywordseo="Zomato" source="keywords">Zomato</keyword> Ltd on Monday reported a consolidated net profit of Rs 175 crore in the March quarter on the back of higher revenue. The company had posted a consolidated net loss of Rs 188 crore in the same quarter last fiscal, Zomato Ltd said in a regulatory filing. Consolidated revenue from operations stood at Rs 3,562 crore. It was Rs 2,056 crore in the year-ago period, it added. Total expenses were at Rs 3,636 crore. The company posted its total expenses at Rs 2,431 crore in the corresponding period a year ago, it said. For the fiscal ended on March 31, 2024, the consolidated net profit was Rs 351 crore. The company had posted a consolidated net loss of Rs 971 crore in the previous fiscal ended on March 31, 2023, the filing said. In FY24, consolidated revenue from operations stood at Rs 12,114 crore. It was at Rs 7,079 crore. The results for the year ended March 31, 2024, are not comparable with the year ended March 31, 2023, due to the acquisition of Blink Commerce Pvt Ltd (formerly known as Grofers India Pvt Ltd) in June 2022, the filing said. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/aadhar-housing-finance-ipo-allotment-how-to-check-allotment-gmp-listing-date-and-more/articleshow/110071990.cms">Aadhar Housing Finance IPO allotment – How to check allotment, GMP, listing date and more</a> <a href="https://www.businessinsider.in/sports/webstories/ipl-decoded-highest-individual-scores-in-ipl-2024-so-far-from-stoinis-to-kohli/slidelist/110008351.cms">IPL Decoded: Highest individual scores in IPL 2024 so far, from Stoinis to Kohli</a> <a href="https://www.businessinsider.in/tech/mobile/news/indian-smartphone-market-up-8-5g-smartphones-account-for-over-70-of-shipments/articleshow/110002512.cms">Indian smartphone market up 8%, 5G smartphones account for over 70% of shipments</a>

Zomato posts Q4 consolidated net profit at ₹175 crore

Food delivery platform Zomato on Tuesday refuted reports that the company is in talks with Gurugram-based grocery delivery platform Grofers to acquire it for nearly $750 million. Flush with funds, Zomato has partnered Grofers for the delivery of essential items – along with other FMCG and grocery stores -- to meet the surge in demand amid social distancing and nationwide lockdown that has now been increased till May 3. In a statement shared with IANS, Zomato said that the company has partnered with Grofers, along with other FMCG companies, local groceries stores and modern retail chains, to pilot its grocery delivery service. "We are not aware of any other conversation with Grofers," a Zomato spokesperson added. After initial hiccups, Zomato has started grocery delivery in over 80 Indian cities with supplying essentials like aata, dal, milk, vegetables and items. According to Prabhu Ram, Head-Industry Intelligence Group, CyberMedia Research (CMR), companies are looking at creative pivots to stay relevant by pursuing new growth opportunities on the back of the new coronavirus pandemic. "Expanding into near adjacencies is a given for companies, such as Zomato. From Zomato's perspective, a partnership or acquisition of Grofers would provide it a good leg-up in its competition with Swiggy to win big in the grocery delivery segment," Ram told IANS. Online food and grocery retail is expected to touch $10.5 billion by 2023, according to a recent report by Bengaluru-based market consulting firm Redseer. Zomato CEO Deepinder Goyal who is bullish on online delivery of essential items, has said that their delivery network in the country is only second to India Post. "We we are putting in every effort to make sure that we put it to good use to serve the community. We'd like to thank the government authorities, grocery stores, FMCG companies &amp; other start-ups that have come forward to partner with us and support the community in this endeavor," Goyal said recently. Zomato is currently valued at nearly $3.2 billion while Grofers' valuation is around $650 million. Menlo Park, California-based Sequoia Capital is a common investor in both the delivery platforms. Zomato in January acquired Uber's Food delivery business in India – UberEats -- in an all-stock deal for nearly Rs 2,500 crore. Uber has 9.99 per cent stake in the Goyal-led food delivery platform. Japanese conglomerate SoftBank, the largest investor in Grofers, is also likely to pump in around $100 million in Zomato. Media reports said last week that Zomato has raised $5 million from British investment manager Baillie Gifford's Pacific Horizon Investment Trust. Zomato earlier raised $150 million from existing investor Ant Financial, an affiliate of Alibaba. The company has also launched the ‘Feed the Daily Wager' initiative to support and ensure meals for workers at construction sites, shops, restaurants, delivery staff, and local transport systems who earn on daily basis. As part of this campaign, the food delivery giant is providing ration kits to the daily wager communities that are currently unable to support their family's food requirement.

Zomato denies rumours about Grofers acquisition deal amid surge is grocery orders

<ul><li>Indian e-commerce companies raised concerns about their delivery agents being stopped by the police during <keyword id="91743" type="PERSON" weightage="20" keywordseo="lockdown">lockdown</keyword>. Some have even been arrested.</li><li>Under directives issued by the government, e-commerce comes under the essential services umbrella. </li><li>It means that delivery agents from <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword>, <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>, <keyword id="830092" type="COMPANY" weightage="20" keywordseo="Zomato">Zomato</keyword>, Swiggy, Bigbasket, Grofers and others should be able to continue with work. </li></ul>Since March 22, India has been in a lockdown to contain the spread of <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">Coronavirus</keyword>. While offices, malls are shut, ‘essential services’ like grocery stores, pharmacies are allowed to stay open. In a relief for the Indian e-commerce sector, online retail too fell under the essential services category. However, the relief was been short-lived. Delivery agents from Amazon, Flipkart, Zomato, Grofers, Milkbasket and others were stopped by the police on the roads. Some have also been arrested. On Janata <keyword id="23410" type="PERSON" weightage="20" keywordseo="Curfew">curfew</keyword> (March 22), Grofers said that its delivery agents were stopped and arrested by the police across the country, leading to a delay of over 60,000 orders. Another <keyword id="2709620" type="PERSON" weightage="20" keywordseo="grocery-delivery">grocery delivery</keyword> startup Milkbasket said that its staff, vendors and vehicles are being pushed back from the roads by local police, disrupting our operations. “We are being told to shut down our distribution centers. Yesterday we had to cancel thousands of orders. We could only operate at 40% capacity in Gurgaon. Even lower in Noida. We might have to cancel all the orders today, impacting over 150,000 families across 4 cities,” said the company’s official statement. Even their warehouses are being asked to shut down. But they aren’t alone. E-commerce behemoths Amazon and Flipkart are facing similar issues. “We are working with the local authorities to enable us to perform these important services providing safety for our delivery associates and allowing them to make sure those priority goods can arrive safely at our customers’ homes without any disruption,” an Amazon spokesperson told Business Insider. While they intend to move ahead with uninterrupted services during the testing times, they are also working with local authorities to work on the issues. “There are operational issues on-ground which impact our ability to seamlessly service the communities as they stay indoors. We are working with the central and state government as an industry to solve these challenges,” a Flipkart spokesperson told Business Insider. A Zomato spokesperson told Business Insider that these are unprecedented times. “The government has provided strong guidance which we are adhering by and trying our best to execute on the ground. Coordinating with multiple local authorities is challenging however, we are hoping to iron this out soon,” said the spokesperson As people stay at home, they are relying more and more on online deliveries. But if these issues continue to rise, it could lead to the delay and cancellation of thousands of orders from across the country. Perhaps, having a uniform for delivery agents could be the answer, but one of the e-commerce giants told Business Insider that most of the companies already have an uniform and it hasn’t helped. All the e-commerce companies are appealing to the government to sort out problems for seamless deliveries of essential supplies. “A suggestion would be to issue access permits / ID cards to staff engaged in essential services such as grocery delivery, medicines, food delivery, and others,” suggested Milkbasket. As many states move from lockdown to curfews, the agents will have to be issued curfew passes which is another roadblock that e-commerce companies have to overcome. See Also: <a href="https://www.businessinsider.in/business/ecommerce/news/grofers-says-its-delivery-agents-were-arrested-during-janata-curfew-led-to-a-delay-of-60000-orders/articleshow/74766803.cms">Grofers says its delivery agents were arrested during Janata curfew, led to a delay of 60,000 orders</a>

Amazon, Flipkart, Zomato fall under ‘essential services’ but their delivery agents are being stopped by the police

<ul><li>While Zomato’s sales have been increasing, the food delivery giant is still unable to make profits on account of huge expenses led by discounts and marketing.</li><li>It posted a net loss of ₹1,222 crore for the March quarter, which is an increase of nearly 50% since last year.</li><li>However, analysts believe the food delivery business has a huge potential as it is estimated to be a $110 billion opportunity by 2025.</li><li>Both Zomato and its rival Swiggy together hold 90-95% market share in India’s food delivery business.</li></ul>Food delivery company Zomato has been reeling under the pressure to turn profitable since July last year, <a href="http://a-strong-public-market-debut-at-51-premium-shares-open-at-115/articleshow/84667265.cms">the day it went public </a>and raised over ₹9,000 crore from the public. Since its listing, Zomato investors have seen their wealth decline by half, and there seems to be no letting up yet. Brokerages believe there might be a chance for the company to woo investors in a few years as there lies a huge opportunity in front of them. According to a report by JM Financial, Zomato’s path to operational profitability (also known as EBITDA profitability) requires two things. EBITDA is short for earnings before interest, taxes, depreciation and amortisation. “We believe order volumes and contribution margin per order are two key variables that would determine Zomato’s path to profitability. Our analysis suggests the company can turn profitable in FY25 on a cash EBITDA basis if it were to reach annual order volumes of 1 billion (2.5x FY20 levels) and a contribution margin of around ₹21 per order,” said the report. Adding to it, the report says it sees a ramp-up beyond the food ecosystem can also provide incremental growth. It expects Zomato to follow global peers in terms of expanding beyond food delivery and explore adjacencies in the form of grocery delivery, alcohol delivery, medicine delivery, on-demand delivery and insta shopping. Its recent investment in Grofers and a majority stake in Fitso is a validation of expansion into adjacent areas, states the report. Gen Z population offers attractive growth opportunities to Zomato The number of online shoppers in India is <a href="https://www.businessinsider.in/business/ecommerce/news/india-will-have-more-ecommerce-users-by-2025-than-us-population/articleshow/92062424.cms">expected to grow </a>to 300- 350 million by FY25 from 100-110 million in FY20 according to Bain &amp; Company. “With around 10 million monthly active users, the current penetration rate for Zomato within the online product shopper base works out to around 10%. We expect this penetration to increase to around 15% over the next 5 years, effectively growing the monthly active user base of Zomato to 45 million by FY26,” said the report. The brokerage expects the growth to be driven by the growing share of millennials/Gen Z in the ‘earning’ population and fast-growing e-commerce penetration beyond Tier-1 cities. Customer addition remains strong, but 9 out of 10 orders are from old users New customer additions by Zomato remained strong in Jan-Mar with around 5.5 million new additions. However, more than 90% of its food delivery business is being driven by repeat users compared to new users. “The company expects growth in the near term to be driven by repeat customers as there is substantial room for improvement in average annual ordering frequency (which is around 10 per user per year),” said the report by JM Financial. Zomato now operates in more than 1,000 cities across India as it added 300 plus new cities in Jan-Mar. Top 8 cities contributed around 60% to gross order value. However, its losses continue to swell, ballooning by nearly 50% in the March quarter to ₹1,222 crore, when compared to the previous year. Some analysts believe the change in the company’s performance needs to happen soon to turn around the loser story. “With the current inflation, the margins will lower further due to increased cost of fuel, raw materials etc. Acquiring different companies won’t help much in expansion, rather it will make management more difficult,” said Majoj Dalmia, founder and director at Proficient Equities. “Existing management needs to be optimised for profitability; the growth prospects will depend on current performance and not future, if there is a turnaround now, then we can expect some good growth story,” he added. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/business/startups/news/pepper-content-raises-14-million-to-enter-the-us-market/articleshow/92084581.cms">INTERVIEW: Pepper Content skip the traditional Middle East route, heads directly for the US market</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/stock-market/news/wipro-yes-bank-tata-power-among-stocks-to-watch-out-for-on-june-9/slidelist/92094551.cms">Wipro, Yes Bank, Tata Power among stocks to watch out for on June 9</a>

Zomato’s path to profitability in the next three years requires two things, say analysts

<ul><li><keyword id="830092" type="General" weightage="20" keywordseo="zomato" source="Orion">Zomato</keyword> is re-entering the grocery delivery segment for the third time by acquiring quick commerce player <keyword id="12724311" type="General" weightage="20" keywordseo="blinkit" source="Orion">Blinkit</keyword> (formerly known as Grofers).</li><li>Earlier, in April 2020, Zomato had ventured into the grocery delivery business but pulled out later because of a huge logistics mess.</li><li>Again in July 2021, it took a chance and ended up burning millions of cash.</li><li>Meanwhile, its rival Swiggy has comfortably continued Instamart services on its platform for two years.</li></ul>Zomato is again trying its hand at something that it has failed twice at – grocery delivery. This time around, the quick commerce delivery segment that it’s entering into is crowded and filled with players like Dunzo backed by Reliance Industries, Tata backed BigBasket and of course, Zomato’s traditional rival Swiggy, with its Instamart offerings. And, brokerages are not thrilled with its third time coming. “We claim for Zomato that building a <keyword id="1186907" type="General" weightage="20" keywordseo="grocery-business" source="Orion">grocery business</keyword> will work as a ‘poison pill’. It would need reasonably high investment and hence cash burn and is likely to be a significant logistical challenge to execute as well but still Zomato can’t afford not to do it,” said a report by HSBC. <cmsannotation type="cmsannotation" annotationid="What’s a poison pill and how does it work?" comment="subhead" text="What’s a poison pill and how does it work?">What’s a poison pill and how does it work?</cmsannotation> A poison pill is an action that can intrinsically lower the value of an organization – a strategy adopted by companies to save themselves from a hostile takeover. However, analysts believe that this venture will have the same yet unintended effects on Zomato. Both Zomato’s vain attempts were after the Covid-19 outbreak in April 2020 and faced a logistics nightmare. In July 2021, it took a dive yet again and ended up burning millions instead. This time around however it is likely to do it via the acquisition of Blinkit, formerly known as Grofers. The Zomato board is expected to make a decision on the same this time. So why are analysts worried about this foray which has worked well for Swiggy. <cmsannotation type="cmsannotation" annotationid="Swiggy can do it but can Zomato do it too?" comment="subhead" text="Swiggy can do it but can Zomato do it too?">Swiggy can do it but can Zomato do it too?</cmsannotation> For one, a bulk of Swiggy’s grocery customers are its existing food customers. Being on the same app offers much needed ease of use, and the loyalty programme benefits are seamless too – along with the advantages of merging food and grocery delivery orders. Moreover, Swiggy can gain pure grocery customers too and target them for their food offerings, thereby hurting Zomato’s core food business. “Consequently, Zomato has to build its grocery capabilities quickly and in our view has to merge the apps effectively to leverage its customer base for grocery. Running it separately is unlikely to create much value as customer acquisition cost will be high for Blinkit, with inferior customer stickiness,” says HSBC. To build a successful business, Zomato has to cross-sell to its existing customer base, integrate the tech stack and also add infrastructure to ensure delivery — a cost and execution abilities that its food business never needed. Quick commerce delivery and full kitchen offerings would need them to maintain and manage stock keeping units (SKUs). “The former are ‘instinctive’ purchases, while the latter are planned. Theoretically, instinctive purchases are less discount-driven and more need-driven, while planned are more discount- and assortment-driven,” the HSBC report says. While the going might get tough with challenges, Zomato also cannot afford to ignore this fast growing segment – and if well executed can provide it with incremental returns. “We expect Zomato to follow global peers in terms of expanding beyond food delivery and explore adjacencies in the form of grocery delivery, alcohol delivery, medicine delivery, on demand delivery and insta shopping,” said a report by JM Financial. The total grocery market was valued at around $573 billion in gross merchandise value (GMV) terms in 2020, according to Redseer estimates. Further, driven by Covid-19 tailwinds, the online grocery delivery market is expected to report a CAGR of around 49% over the next 5 years to reach $24 billion by 2025. SEE ALSO <a href="https://www.businessinsider.in/india/news/indias-richest-people-are-moving-to-uae-australia-and-singapore/articleshow/92181712.cms" style="">India’s richest are moving to UAE, Australia and Singapore — but there’s nothing to worry</a> <a href="https://www.businessinsider.in/business/corporates/news/nearly-four-lakh-fliers-are-thronging-airports-every-day-and-indigo-is-flying-half-of-them/articleshow/92179593.cms" style="">Nearly four lakh fliers are thronging airports every day and Indigo is flying half of them</a> <a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-will-gain-the-most-from-economic-recovery-and-also-regain-lost-market-share-say-brokerages/articleshow/92171487.cms" style="">Maruti Suzuki will gain the most from economic recovery and also regain lost market share, say brokerages</a>

Swiggy’s Instamart is a success but a grocery entry can become Zomato’s ‘poison pill’ says report

<ul><li><keyword id="830092" type="General" weightage="20" keywordseo="zomato" source="Orion">Zomato</keyword> has accused that it is taking necessary steps to ensure the safety of their partners and not put them under pressure.</li><li>IFAT is an association of 35,000 service professionals working with Zomato, Swiggy, Uber, Ola and others.</li><li>The company will start its 10-minute delivery operation in Gurugram from next month.</li></ul>Even as Zomato is celebrating its entry into the 10-minute food delivery space, the delivery partners — who are going to be executing it on the ground — do not seem too excited about it. The Indian Federation of App-based Transport Workers (IFAT) and Telangana Gig and Platform Workers Union (TGPWU) have called out the company for not fixing current issues in their system. The association has urged the company to treat their delivery partners as human beings. Shaik Salauddin, the national general secretary of IFAT and the founder state head of TGPWU, noted, “Zomato in most of the cases has not been able to resolve issues like leaked meals, which arises from faulty packaging and executing fast delivery. As a result delivery partners/workers have been penalised quite a few times. While planning to provide 10-min [sic] deliveries to its customers Zomato needs to resolve these issues and concerns of the workers.” “Further we urge Zomato to look [at] their delivery workers as human beings [as they] are more than data points for the algorithm to manage,” he added. Notably, IFAT is an association of 35,000 service professionals working with Zomato, Swiggy, Uber, Ola and others. He further noted that the company should take care of the issues and the concerns raised by the delivery partners before it assures the customers of “lightning fast” delivery. The company also needs to provide resting areas, access to bathrooms, charging stations and wifi access to its delivery partners before starting “finishing stations” for quick delivery in Gurugram, the association added. This is not the first time that someone has raised issues with the 10-minute delivery model. Previously, a netizen raised a petition to<a href="https://www.businessinsider.in/business/startups/news/swiggy-dunzo-zepto-and-grofers-should-roll-back-10-minute-delivery-says-petition/articleshow/89900739.cms"> urge companies like Swiggy, Blinkit (Grofers), Zepto and Dunzo</a> to do away with their 10-minute delivery services. The petition noted that the 10-minute delivery services adds extra pressure on delivery partners, who have to resort to overspeeding and traffic rule violations to fulfill these orders on time as well as avoid being penalised by the platforms. IFAT had also agreed to the content of the petition. Zomato has mentioned that it will not be showing the delivery time to delivery partners or penalising them for late delivery. The company has taken this step to ensure the safety of their partners and not put them under pressure. The company will roll its 10-minute delivery service in Gurugram next month and later look to expand to other cities. SEE ALSO <a href="https://www.businessinsider.in/business/news/explained-here-is-how-zomatos-10-minute-delivery-would-work/articleshow/90376193.cms" data-type="tilCustomLink">EXPLAINED: Here is how Zomato’s 10-minute delivery would work</a> <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/zomato-share-price-dip-after-company-announces-10-minute-delivery-plans/articleshow/90367659.cms">Zomato's 10-minute delivery fails to cheer stock market investors</a> <a href="https://www.businessinsider.in/india/news/petrol-and-diesel-prices-hiked-after-more-than-four-months-lpg-price-goes-up-by-50-in-delhi-and-mumbai/articleshow/90366409.cms">Petrol and diesel prices hiked after more than four months, LPG price goes up by ₹50 in Delhi and Mumbai</a>

Partners’ association tells Zomato to see delivery executives as human beings

<keyword id="12744044" type="General" weightage="20" keywordseo="Groceries-delivery" source="Orion">Groceries delivery</keyword> giant <keyword id="2466939" type="General" weightage="100" keywordseo="grofers" source="Orion">Grofers</keyword> — which rebranded itself to <keyword id="12724311" type="General" weightage="80" keywordseo="blinkit" source="Orion">Blinkit</keyword> last week in order to further emphasis on its quick commerce image — has shut down stores and is limiting its operations to only those areas where it can deliver products within 10 minutes. The company is operational in 30 cities, 12 of which do offer 10 minute delivery. A quick look at the Blinkit (Grofers) site shows that their services aren’t available in Agra, Ahmedabad, Panipat, Rohtak, Allahabad, Durgapur (West Bengal), and Vadodara. These are some of the cities where the erstwhile Grofers had <a href="https://www.livemint.com/companies/news/grofers-founder-criticised-for-10-minute-grocery-delivery-his-reply-11630160621963.html">launched deliveries in 2019</a>. “ The remaining 18 cities were the ones where the company still offers its regular one day delivery. “The Blinkit service will now be available in only the areas where we are able to arrive at users location within 10 minutes (or less),” founder and chief executive (CEO) <keyword id="2744778" type="General" weightage="20" keywordseo="Albinder-Dhindsa" source="Orion">Albinder Dhindsa</keyword> announced on Twitter. Similarly, Business Insider also checked for some key residential locations within the big cities like Mumbai, Kolkata, Delhi, Chennai, Hyderabad and Bengaluru. These are some of the areas where either Blinkit doesn’t seem to be delivering as per the website: Tollygunge, Kasba, Jadavpur, Bhowanipore, and New Alipore in Kolkata; Kalina, Kandivali, Kharghar, Sion, and Andheri East in Mumbai; Shanti Niketan, Hauz Khas Enclave, Green Park, and Punjabi Bagh in New Delhi; Cox Town, Lalbagh, Rajaji Nagar, Shivaji Nagar, and RT Nagar in Bengaluru; Ambattur, Velachery, Pallavaram, Perungudi, KK Nagar, Mylapore, and Thiruvanmiyur in Chennai. In Hyderabad, the services are not available. There may be variations based on specific location or housing society that you may live in. You can add your specific location and verify if deliveries are available. <div type="image" title="Blinkit in Hyderabad" height="900" width="1200" msid="88389012" hostid="261" caption="&amp;lt;p&amp;gt;Blinkit in Hyderabad&amp;lt;/p&amp;gt;"></div> This move will impact 75,000 of the 200,000 daily customers of the company, Blinkit said., It is currently executing its 10-minute delivery in 12 cities through over 250 stores and plans to take this number to 530 stores by next month. It plans to serve through 1,000 stores by the middle of next year, the company’s CEO had told Business Insider last week. However, industry experts believe that the number is simply too low. Here’s Business Insider’s analysis of Grofers’ ambitious plan for quick commerce based on <a href="https://www.businessinsider.in/business/startups/news/grofers-founder-explains-why-he-rushed-to-rebrand-the-startup-and-his-plans-seem-ambitious/articleshow/88320706.cms">an interview with Dhindsa</a>. The chief executive officer of a firm in the quick commerce space, on the condition of anonymity, told Business Insider, “We did some maths on our end to do 10-minute delivery in a city like Bangalore [Bengaluru], you will need close to 80-90 stores. If you have to deliver in Delhi [under 10 minutes], you would need around 300-400 stores. But maybe they [Grofers] are not operating everywhere, they are only offering 10-minute delivery to places with dense localities.” However, Grofers is not cutting back on the inventory. It plans to offer 4,000-7,000 stock keeping unit (SKU) ⁠— simply put product range ⁠— whereas other players in the quick deliveries space only offer 1,000-1,500 SKU because it is simple to manage when making deliveries in 10 minutes. Grofers, now Blinkit, was founded in 2013 by Albinder Dhindsa and Saurabh Kumar. The company has raised close to $800 million to date from marquee investors such as Zomato, <keyword id="526777" type="General" weightage="20" keywordseo="tiger-global" source="Orion">Tiger Global</keyword>, Softbank and others. It crossed $1 billion in valuation earlier this year. The company has spent over eight years building and scaling its delivery operations.. The company had <a href="https://www.businessinsider.in/business/startups/news/after-giving-up-on-90-minute-delivery-five-years-ago-due-to-lack-of-profitability-grofers-is-now-chasing-10-minute-delivery/articleshow/88253221.cms">decided to move out of its 90-minute delivery </a>option five years ago, but it now believes that “instant commerce is indistinguishable from magic”. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/used-car-marketplace-cars24-has-raised-as-much-as-dream11-this-year-to-set-up-operation-overseas/articleshow/88386057.cms">Used car marketplace Cars24 has raised as much as Dream11 this year to set up operation overseas</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/how-do-rising-covid-19-cases-lead-to-a-fall-in-markets/articleshow/88385905.cms">Why is the stock market falling so sharply today?</a>

Grofers has now shutdown 18 location after rebranding to Blinkit ⁠— here’s how you can check if deliveries are available in your locality

<ul><li>The Softbank-backed startup is planning to head for a listing in the US through a special purpose acquisition company.</li><li><keyword id="2466939" type="PERSON" weightage="20" keywordseo="Grofers">Grofers</keyword> is now seeking a valuation of $1 billion.</li><li>Here’s a deep dive into Grofers’ business.</li></ul>India’s grocery market is estimated to be $600 billion and less than 5% of it is organised, according to HDFC Securities. Grofers has a tiny sliver of that small pie. It is one of the top 10 organised retailers in India but it’s still a tough space to compete in. Who leads in any competitive business also decides who gets a bulk of the investors’ money. In that, Softbank-backed grocery startup Grofers is running against <keyword id="8506093" type="UNKNOWN" weightage="20" keywordseo="Jiomart">JioMart</keyword>, backed by the mighty Mukesh Ambani (Asia’s second richest man), and an early bird like <keyword id="964794" type="COMPANY" weightage="20" keywordseo="BigBasket">BigBasket</keyword>, a unicorn which the $100 billion Tata Group is in talks with for a majority stake. <div type="image" title="Grocery." msid="80874973" hostid="261"></div> Just as tight the competition is in everyday business, raising money may be as difficult as a spate of initial public offerings (IPO) from the retail ⁠— both online and offline⁠— space are in the works, at different stages. Therefore, as <a href="https://www.bloomberg.com/news/articles/2021-02-11/softbank-backed-grofers-said-to-weigh-listing-via-u-s-spac-deal?srnd=technology-vp&amp;sref=zNmRQ0gk">reports suggest</a>, Grofers may opt for a listing in the US through a special purpose acquisition company (SPAC). The reason why a SPAC is better than an IPO is best described by Don Butler, Managing Director at Thomvest Ventures. “An IPO is basically a company looking for money, while a SPAC is money looking for a company,” he recently <a href="https://news.crunchbase.com/news/spac-vs-traditional-ipo-investors-see-benefits-of-blank-check-companies/">said</a>. <cmsannotation type="cmsannotation" annotationid="What is SPAC?" comment="subhead" text="What is SPAC?">What is SPAC?</cmsannotation> SPAC companies are generally formed as “blank cheque” firms with the specific purpose to raise capital through a market debut to acquire another company. Grofers could either raise money from investors by selling shares directly. Or, it could sell to a company that is already listed. When a deal is formed through SPAC, the companies have two years to complete the acquisition. If the deal fails to go through, the SPAC will have to return all money to the investors. Through a SPAC deal, companies don’t have to go through the traditional paperwork hassles needed for an IPO. There are many advantages of opting for a SPAC deal, first the company (here Grofers) would get direct expertise from a company that has been in the business of taking firms to the public markets, and SPACS also acquires companies at a premium, giving more value to the initial investors in the company. And that’s how the Softbank-backed Grofers is now seeking a valuation of $1 billion. The startup had last raised funding in May 2018 when it got a $220 million cheque from SoftBank and was valued around $700 million. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lead investors in Grofers </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SoftBank Vision Fund </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sequoia Capital </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bennett Coleman </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Abu Dhabi Capital Group </td></tr></tbody></table> Since then, the startup has had several talks for funding and acquisitions with rival companies like Zomato, Paytm Mall, none of which have worked out. <cmsannotation type="cmsannotation" annotationid="Some of the world’s richest people are competing for a slice of India’s growing online retail" comment="subhead" text="Some of the world’s richest people are competing for a slice of India’s growing online retail">Some of the world’s richest people are competing for a slice of India’s growing online retail</cmsannotation> India’s grocery segment which is a $545 billion market, according to Goldman Sachs. It has several players eyeing for the highest market share. Grofers, which until recently enjoyed being in a mostly two-player market, suddenly has many more competitors to watch out for. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Who Grofers is pitted against </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">India’s richest man Mukesh Ambani’s JioMart </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">World’s richest man Jeff Bezos’s Amazon </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">One of the world’s biggest retailers Walmart-owned Flipkart </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">One of India’s biggest conglomerates Tata which is looking to acquire BigBasket and is keen on creating a superapp </td></tr></tbody></table> <cmsannotation type="cmsannotation" annotationid="A deep dive into Grofers’ business" comment="subhead" text="A deep dive into Grofers’ business">A deep dive into Grofers’ business</cmsannotation> Grofers in the last financial year reported an annualized Gross Merchandising Volume of $600 million. Even while Grofers in January 2020 had said that it had achieved breakeven in cities like Delhi and Kolkata, it continued to bleed red in its overall business. As much as 75% of its revenue comes from the top four cities alone. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Grofers </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Revenue </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Loss </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY20 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹176.7 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹637.4 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY19 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹83.6 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹448 crore </td></tr></tbody></table>Source: Tofler During the COVID-19 pandemic, tables turned for Grofers as it did for other e-grocery startups like BigBasket, JioMart etc. In a Goldman Sachs report from November 2020, Grofers had said that its revenues were up by 85% from April 2020, as the demand for online grocery grew. “...it has been proﬁtable (contribution margin) on every order delivered since the start of COVID-19,” said the report. Snapshot of Grofers <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Monthly transacting users </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Monthly Active Users </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Basket size </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Presence </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.5 million </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8-10 million </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$28 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">29 cities </td></tr></tbody></table>Source: Goldman Sachs <cmsannotation type="cmsannotation" annotationid="Betting on private labels" comment="subhead" text="Betting on private labels">Betting on private labels</cmsannotation> Grofers has also been betting big on its private labels business, with the aim of running its business purely with its own brands. In April 2020, the company said that it would pump in $15 million into its private label business. And it made business sense as private labels are high gross margin products for the company, as much as 20% higher in consumer packaged goods and 5% higher in staples, according to the Goldman Sachs report. SEE ALSO: <a href="https://www.businessinsider.in/india/news/spicejet-and-indigo-stocks-take-off-as-a-2-hour-flight-could-now-cost-up-to-13000/articleshow/80873865.cms">SpiceJet and IndiGo stocks take off as a 2-hour flight could now cost up to ₹13,000</a> <a href="https://www.businessinsider.in/business/startups/news/chaos-at-upgrad-mass-resignations-pour-in-as-angry-employees-refuse-to-relocate-instantly/articleshow/80824504.cms">Chaos at upGrad⁠— mass resignations pour in as angry employees refuse to relocate instantly</a>

You Searched For "zomato grofers" and got 8 results

Zomato posts Q4 consolidated net profit at ₹175 crore

PTI

Zomato denies rumours about Grofers acquisition deal amid surge is grocery orders

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Amazon, Flipkart, Zomato fall under ‘essential services’ but their delivery agents are being stopped by the police

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Zomato’s path to profitability in the next three years requires two things, say analysts

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Swiggy’s Instamart is a success but a grocery entry can become Zomato’s ‘poison pill’ says report

Bhakti Makwana

Partners’ association tells Zomato to see delivery executives as human beings

Kritti Bhalla

Grofers has now shutdown 18 location after rebranding to Blinkit ⁠— here’s how you can check if deliveries are available in your locality

Kritti Bhalla

Here’s why Grofers may allow an American 'blank cheque' firm to buy it out instead of fighting Ambani and BigBasket for IPO

Sanchita Dash

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