The Japanese Internet Conglomerate, SoftBank Group Corp is reportedly in talks over a possible investment in food delivery and online restaurant company Zomato as told by sources familiar with the matter.
The possibility of Softbank’s future investment in Zomato has been speculating in the market since six months back when the Japanese giant first held conversations exploring a possible funding of up to $200-250 million in Bengaluru-based Swiggy. “SoftBank which has already backed Flipkart now eyes to make a niche for itself in the food delivery market said one of the sources.
The development comes as SoftBank is reportedly yet to decide on selling its more than 20% stake in Flipkart to US retailer Walmart. The Report says that SoftBank is currently discussing business metrics across Zomato’s three main business lines and its international expansion plans for the next few years.
Meanwhile, restaurant search platform Zomato has raised $200 million from Chinese e-commerce player Alibaba Group’s payment affiliate Alipay citing a valuation of more than $1 billion.
SoftBank has invested heavily in Indian internet companies in recent years. It also has a minority stake in Alibaba and has also invested in Online digital payment Paytm Mall.
Additionally, As reported by Economic Times, the investment firm has also held multiple conversations with Swiggy, people familiar with the matter added that “Swiggy is of the view that it is still little early to raise a large cheque from the Japanese firm”.
Market Experts believe that food delivery sector, in particular, is a logically driven business narrowing to one need- “food” has an enormous potential for investors to pour in large amounts of capital.
K Ganesh, founder of startup factory Growth Story, promoter of cloud kitchen firm Freshmenu and grocery portal Big Basket says, “For Softbank, to deploy large pools of capital of $100-400 million and move the needle, it needs core sectors such as (food delivery) that can absorb (such money) and give significant returns too.”
Hence, going over the head on competition between Swiggy and Zomato at present, Softbank’s investment in any one of the companies will surely tip the power of balance in the favour of chosen one.