Amazon Plans to Buy Stake in IPO-Bound Swiggy’s Instamart Business

According to reports, foodtech company Swiggy has been contacted by e-commerce behemoth Amazon India about a possible partnership including its Instamart rapid commerce division.

“There are several obstacles at the moment, but Amazon has jumped in with interest to either pick up a stake in the ongoing pre-IPO placement or a buyout proposal for Instamart,” a source said.

Several media groups have contacted Swiggy and Amazon India to inquire about the situation. Their answers will determine how the article is updated. According to the article, no formal offer has yet been made, and Amazon’s Seattle headquarters will need to move swiftly if the negotiations are to move forward.

It further stated that given the intricate nature of the proposal in its current shape, the initial talks might not result in a transaction.

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“At a valuation of $10–12 billion, purchasing the entire business will be prohibitively costly. The source continued, “Amazon is not often known to acquire minority stakes.

Amazon has been working on its own fast commerce strategy for months, which is why the e-commerce behemoth is interested in Swiggy Instamart. However, as it doesn’t provide the service in any of its markets worldwide, they will need global authorization for it as well as a different vertical.

One of Swiggy’s most ardent backers, Prosus, now holds a 33% investment in the company and is in the process of reducing it to less than 26% in advance of the IPO, at which point it wants to avoid being classified as a promoter.

According to earlier reports, Flipkart and Swiggy attempted to strike a similar agreement last year, but the negotiations broke down over a valuation discrepancy. There were also reports that Flipkart and Zepto were in acquisition talks.

With same-day delivery becoming more and more popular in the nation, Amazon India is putting more emphasis on it. Prime customers now receive twice as many same-day deliveries because to investments made in bolstering the delivery network. Furthermore, Amazon India has increased the number of products it can deliver the next day to 4 million, and 50% of all Prime orders are delivered across all pin codes the same day or the day after.

This most recent development coincides with Swiggy preparing for its IPO. In April, the foodtech behemoth submitted a confidential draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI). Through the IPO, which is expected to feature a new share offering valued at INR 3,750.1 Cr and an offer for sale (OFS) component worth up to INR 6,664 Cr, Swiggy hopes to raise over INR 10,000 Cr.