In August of the previous year, ShipRocket, supported by Zomato, secured $33.5 million in funding, elevating its valuation to approximately $1.2 billion.
Following Blinkit, Zomato, the online food delivery platform, is eyeing another significant acquisition. The company has proposed a $2 billion deal to acquire ShipRocket, a domestic logistics solutions provider, as reported by Bloomberg, citing informed sources. The decision on the acquisition is yet to be finalized.
ShipRocket, backed by Zomato, had previously raised $33.5 million in August, valuing the company at approximately $1.2 billion. In the same month, Zomato successfully acquired Blinkit (formerly Grofers), along with its warehousing and support services business, for a transaction worth Rs 4,447 crore. Zomato’s shares have been on an upward trajectory, crossing Rs 128 from Rs 46 in January, marking a remarkable return of 117.47 percent. Market experts anticipate a continued rise in share prices, attributing it to the company’s recent profitability.
ShipRocket, established in 2017, provides a technology stack to assist retailers in integrating their shopping websites on platforms such as Shopify, Magento, WooCommerce, Zoho, and others. ShipRocket is currently in talks with leading VC firms to secure funding of Rs 75-100 million, led by the US-based investment firm Tribe Capital.
While ongoing discussions about funding are reported, both Tribe Capital and ShipRocket have refrained from commenting on the matter. ShipRocket, headquartered in Bengaluru, aims to be IPO-ready within the next 12 to 18 months, with plans to distribute approximately Rs 100 crore to small and medium-sized businesses (SMBs) in the coming year.
Zomato Shares Soar Amid Acquisition Buzz, Company Denies Rumors
Zomato shares surged by 2.7%, reaching a day’s high of Rs 130.8, closely approaching the 52-week high touched on December 19, 2023, during early morning trading on the NSE. The stock closed at Rs 127.9, marking an increase of Rs 0.43 or 0.55% on the NSE. Zomato, in a statement, emphasized that the company refrains from commenting on media speculation. However, the clarification was provided “out of abundant caution” due to the substantial size of the deal mentioned in the news article and the potential market uncertainty it may trigger.
Despite Jefferies reiterating a ‘buy’ call on Zomato with a target of Rs 165, the global brokerage acknowledged the denial of the news. In response to the denied acquisition, Jefferies suggested that, if confirmed, the shares could experience weakness. The brokerage expressed skepticism about the likelihood of the deal at this stage, citing the management’s full plate of responsibilities. Jefferies pointed out that Quick Commerce is still in the ramp-up phase, and the company is actively balancing growth and margin considerations in the food delivery segment.
Zomato CEO Denies Shiprocket Acquisition Amidst $2 Billion Speculation
On Thursday, Zomato’s CEO, Deepinder Goyal, clarified that the company is not pursuing the acquisition of logistics aggregator Shiprocket and urged investors to exercise caution.
Earlier the same day, Bloomberg reported Zomato’s alleged offer to acquire the e-commerce shipping startup Shiprocket for approximately $2 billion. While Zomato has indeed proposed the acquisition of Shiprocket, a company also backed by Info Edge, Temasek, and Lightrock, no final decision has been reached, according to the report. It’s worth noting that Zomato is already an investor in Shiprocket and also owns the quick commerce platform Blinkit.
In November, Shiprocket revealed an impressive 78% surge in its operating revenue for the financial year ending on March 31, 2023. The logistics startup reported operating revenue of about Rs 1,089 crore in FY23, marking a 1.7X increase from the Rs 611 crore reported in FY22.
