Flipkart had explored stake in Swiggy to enter quick-commerce market: Report

About eight to ten months ago, Flipkart considered buying a stake in Swiggy. These discussions were meant to form a partnership between two of India’s biggest internet companies, according to a report by The Economic Times. However, the talks fell apart because they couldn't agree on the value of Swiggy. After the talks ended, Swiggy filed a confidential application in April to go public.

Prosus, the company that owns 33 per cent of Swiggy, was part of the discussions and reportedly wanted to sell some of its shares. The idea was for Flipkart to buy a majority stake, but disagreements over the value and the majority stake demand stopped the deal. 

Reports in April suggested that Swiggy's shareholders approved a plan for a $1.25-billion public issue, which includes 450 million new shares and an $800-million sale by existing shareholders. This approval came during a special meeting on April 23. Swiggy aims to raise up to Rs 3,750 crore through new shares, plus up to Rs 6,664 crore through the sale of existing shares.

Swiggy denied any talks with Flipkart. The report cited a Swiggy spokesperson saying, “No such conversation/negotiation/discussion has ever taken place.” 

Swiggy's main competitor, Zomato, went public in 2021. As of the first half of 2023, Zomato held about 54% of the food delivery market by value, with Swiggy holding the rest. Swiggy is backed by investors like Prosus, Accel, SoftBank, and Invesco. It was valued at $10.7 billion after raising $700 million in 2022. A report by Bernstein Research in March 2024 estimated this market to be worth $133 billion.

Swiggy’s quick commerce service, Instamart, is facing strong competition from Zomato’s Blinkit and Zepto. Flipkart plans to start its own quick commerce service next month and is expected to invest heavily in it.

The report suggests that Flipkart even talked with Zepto about a deal, but it didn’t work out. Zepto recently raised $665 million, doubling its valuation from 2023.