Flipkart tried to buy a stake in Swiggy to compete against Zepto, Blinkit: Report

Flipkart was interested in acquiring a stake in Swiggy to take on q-commerce players Zepto & Blinkit, but the talks fell through over valuation disagreements.

Published on: Jun 25, 2024, 12:59:20 IST

By HT News Desk | Edited by Abhyjith K. Ashokan

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Walmart-owned Flipkart considered buying a stake in food delivery platform Swiggy about eight-ten months ago, but the talks fizzled out due to a valuation mismatch. The talks were part of Flipkart's efforts to take on quick commerce players such as Zepto and Blinkit, according to an Economic Times report. HT couldn't independently verify the information. A Swiggy spokesperson has denied that any such talks took place.

The deal was to enable Flipkart to compete in quick commerce and for Swiggy to compete with larger rival Zomato

Also Read | Flipkart to compete with Blinkit, Zepto? Flipkart Minutes likely launch in July

The Prosus angle in the Swiggy IPO

Prosus, the largest investor in Swiggy with a 33% stake, was part of the negotiations, according to the report. The Dutch-listed investment arm of South African conglomerate Naspers has invested around $1 billion in Swiggy. It has been trying to bring its holding below 26% from the current 33% because otherwise Prosus will be tagged as a ‘promoter’ during Swiggy’s IPO as per Indian rules, which state that a shareholder with a stake of 26% or more is termed a promoter.

Also Read | Zomato to not deliver your orders in plastic containers? Deepinder Goyal's reply

Swiggy was last valued at $10.7 billion following its $700 million funding round in January 2022. In comparison, larger rival Zomato has a market capitalisation of over $20 billion. Zomato listed on the Indian stock market in 2021. It's shares have risen more than 59% in the three years since listing.

Also Read | Maggot in chicken biryani? Swiggy offers Hyderabad man ₹64 refund for ₹318 order

Swiggy in April filed its draft IPO application with the market regulator. Before that, it secured shareholders’ approval for a ₹10,400 crore public issue–which will include ₹3,750 crore of fresh shares and an offer for sale (OFS) of shares worth ₹6,664 crore ($800 million) by existing shareholders.

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HT News Desk
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