Amazon has expressed interest in Swiggy’s quick commerce business Instamart, but no official offer has been made yet. Early discussions suggest a challenging transaction due to the deal’s complexity.
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E-commerce giant Amazon has approached Swiggy and shown interest in the company’s quick commerce business Instamart, says a report in the Economic Times, citing 3 sources aware of the matter. However, there is no official offer for the tablet yet and the report states that early discussions paint a difficult chance of a deal being completed given the complicated structure of the deal in its current form.
“Amazon has swooped in with interest to either pick up a stake in the ongoing pre-IPO placement or a buyout proposal for Instamart… but there are multiple roadblocks at the moment,” the Economic Times report cited a source as saying.
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The report notes that early discussions haven’t hinted at a high chance of the transaction being a success given the complicated nature of the deal in its present form. Reportedly, Swiggy is unlikely to sell only its quick commerce business while Amazon isn’t interested in entering the food delivering space.
Moreover, with Amazon not in a habit of taking minority stakes, the deal which is said to be valued at $10-12 billion would be too expensive for the e-commerce giant.
The report notes that Amazon’s India team has been working on starting its own quick commerce initiative for months but starting a separate vertical would require global clearance since the company does not offer this service in any other global markets.
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Notably, another ET report earlier this year had stated that Flipkart had attempted a similar deal with Swiggy last year but talks had fell through owing to a valuation mismatch.
Swiggy had filed its draft red herring prospectus (DRHP) for an IPO with the Securities and Exchange Board of India (Sebi) via the confidential filing route in April this year. Last week, the company rolled out a $65 million ESPOs liquidity programme valued at $65 million.
