zomato: Zomato offers to acquire Shiprocket for $2 billion: report

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Food and grocery delivery platform Zomato has made an offer to acquire ecommerce shipping startup Shiprocket, Bloomberg reported, citing people in the know. Zomato’s offer values Shiprocket at $2 billion, the report said.

In 2021, Zomato had picked a stake in Shiprocket during its $185-million Series E funding that also saw participation from Singapore’s sovereign wealth fund Temasek and Lightrock India.

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According to sources, discussions over further investing in Shiprocket have happened at Zomato recently, but “no concrete decision has been taken”.

“There are synergies between both companies…and ambitions are in line,” a top Zomato executive said.

Later on Thursday, Zomato issued a clarification on the development in a filing to the stock exchanges, saying, “We deny this statement and would like to caution investors against such incorrect news floating in the market. We remain focused on our existing businesses with no plans for any acquisition at this moment.”

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On Thursday, Zomato’s stock price ended trading 2.4% up at Rs 127.55 per share on the BSE.

Goyal had also invested in Shiprocket previously in his personal capacity, but he later exited the company.

Shiprocket aggregates demand from direct-to-consumer (D2C) brands, micro-entrepreneurs and local brands and sends them to logistics players like Delhivery, Ecom Express and others.

Besides shipping services, Shiprocket also offers its technology stack to retailers to integrate their shopping websites on platforms like Shopify.

In October, Zomato launched its hyperlocal delivery service Xtreme to leverage its two-wheeler fleet of over 3 lakh executives, marking an entry into third-party logistics space. The company has onboarded platforms such as Tata 1MG for this service.

Shiprocket’s overview

While Zomato’s reported offer values Shiprocket at $2 billion, the Gurugram-based startup had last raised funds at a valuation of $1.2 billion.

Shiprocket’s biggest investor is Bertelsmann India Investments, which, according to Tracxn, held around 25% stake in the company. The second biggest shareholder is Tribe Capital with close to 15% stake.

Notably, Tribe Capital is also learnt to be in discussions to invest around $75-80 million in Shiprocket, including a primary capital infusion and secondary stake buy.

Founded by Saahil Goel, Gautam Kapoor, Akshay Ghulati, and Vishesh Khurana in 2012, Shiprocket offers tech-enabled warehousing solutions for both retail and ecommerce brands.

The company has more than 42 warehouses across India, including three new warehouse facilities launched in Gurugram, Mumbai and Bengaluru in August 2022.

For the fiscal year ended March 31, Shiprocket reported a 78% year-on-year increase in its operating revenue to Rs 1,089 crore. The firm’s net loss expanded more than three times to Rs 341 crore on account of absorption of losses from the acquisitions it made during the year.

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