Food delivery app Zomato, has reached an agreement to invest $100 million in online grocer Grofers for about a 10 per cent stake.
Zomato is working to explore public markets later this year. The proposed investment values the seven-year-old start-up Grofers, which sums Softbank as its largest investor, at over $1 billion.
Zomato's proposed investment is part of a broader round, in which others including Tiger Global and SoftBank Vision Fund 2 are expected to crumb in some capital.
The leadership teams at Grofers and Zomato have long been close friends and began exploring this investment earlier this year. Both the firms are also open to the idea of Zomato acquiring a majority stake in Grofers in the coming quarters.
Now the decision hasn't been reached and won't be fully explored until Zomato becomes a publicly-traded company.
Zomato had acquired Uber's Indian food delivery business early last year. Some of its major investors said that it envisages a future where the firm has expanded much beyond the food delivery category.
Grofers has witnessed a sharp surge in its popularity in the past year owing to pandemic and lockdown.