Zomato explores a $2 billion acquisition of Shiprocket

In a strategic move, Zomato, the renowned food delivery platform spearheaded by Deepinder Goyal, is eyeing the acquisition of Shiprocket, a prominent e-commerce shipping startup. The proposed deal, valued at around $2 billion, is yet to be finalized. Shiprocket, supported by investors like Info Edge, Temasek, and Lightrock, is already in the investment portfolio of Zomato.

Shiprocket, founded in 2017 by Saahil Goel, Vishesh Khurana, Akshay Gulati, and Gautam Kapoor, functions as an aggregator of third-party logistics companies, collaborating with 17 courier partners, including Delhivery, FedEx, Aramex, and others.

In the financial year ending on 31 March, 2023, Shiprocket saw a notable 78% surge in operating revenue, reaching approximately Rs 1,089 crore. This marked a substantial increase from Rs 611 crore reported in FY22. However, the company’s net loss widened by 3.6 times, reaching Rs 341 crore in FY23, primarily attributed to multiple acquisitions.

In a bid to support small and medium businesses (SMBs), Shiprocket announced plans to disburse around Rs 100 crore through its financing platform. The initiative aims to provide collateral-free capital to democratize access for SMBs. Shiprocket Capital, the financial arm, has already facilitated access to vital growth capital for approximately 150 SMBs, disbursing over Rs 35 crore during its pilot phase.

Zomato’s interest in Shiprocket aligns with its broader strategy, including the ownership of Blinkit, a quick-commerce platform. The company has invested in Shiprocket and, in early 2023, rebranded Grofers as Blinkit, marking its foray into the quick-commerce segment.

CLSA, in its latest sector note, designates Zomato Ltd. as its top pick in the consumer space, emphasizing the potential of quick commerce beyond metros and tier-1 cities in India. The note indicates that Blinkit achieved positive contribution margins in Q2 FY24, with plans for further expansion.

As Zomato continues to strengthen its position in the market, the potential acquisition of Shiprocket reflects the company’s commitment to diversifying its portfolio and tapping into the growing e-commerce and logistics sectors.