Amazon in talks with Swiggy for stake in Instamart: report

Global e-commerce firm Amazon has shown interest in buying a stake in Swiggy’s quick-commerce business, Instamart, The Economic Times reported. 

Amazon’s interest in the stake comes even as Swiggy has filed draft documents with market regulator Sebi for a $1.25 billion initial public offering (IPO). 

“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,” ET said, citing an unidentified person aware of the developments.

The discussions are at an early stage but some people aware of the talks told the business daily that Amazon needs to act swiftly. There are also complications regarding the deal because Swiggy is unlikely to sell only Instamart while Amazon might not be interested in its food delivery business, they added. 

Swiggy has been offloading secondary stakes in the private market at around $9 billion valuation to reduce the shareholding of one of its oldest backers, Prosus, the report said. 

It, however, does not have a separate valuation for its quick-commerce business Instamart. 

Through the IPO, Swiggy aims to raise $1.25 billion and plans to scale up its Instamart business. In fiscal 2023, Swiggy reported a revenue of ₹8,265 crore ($987 million), marking a 45% increase from the previous fiscal, and a net loss of ₹4,179 crore ($500 million).

Amazon’s interest in the quick-commerce business lies as its own venture has failed to take off. Amazon fresh services, which offer delivery in a few hours, are being overshadowed by Instamart, Zomato’s Blinkit, and independent quick delivery platform Zepto. 

Global brokerage firms estimate the quick commerce market will be worth $6 billion by 2025, the ET report added.