Indian online grocer Grofers said to seek SPAC deal after stalled M&A talks

  • Grofers is considering a merger with a special purpose acquisition company (SPAC) that would allow it to ‘indirectly’ list on one of the US public markets, Bloomberg reports.
  • The Indian online grocer has appointed an adviser to assist with exploring options, but talks are still at an early stage, according to people familiar with the matter.
  • Gurgaon-based is reportedly seeking a SPAC deal that would value it at around $1 billion after negotiations for a potential sale to meal delivery app Zomato or e-commerce firm Paytm Mall hit a dead end.

Why it matters:

SPACs are in vogue, with 219 of the ‘blank check’ companies raising $73 billion in 2020 – a 462% year-on-year increase that beat the $67 billion raised by ‘traditional’ IPOs last year, according to Goldman Sachs.

The vehicles provide a route for privately held businesses — including startups — to quickly access the public markets by merging with already-listed SPACs, rather than going through the full IPO process on their own.

In the agrifoodtech , US indoor farming company AppHarvest completed a $475 million merger with SPAC earlier this month to list on New York’s NASDAQ.

Grofers saw its annual revenue more than double to hit 17.7 billion ($244 million) in FY 2019-20, though its net loss widened 42% to over 63.7 billion ($877 million) over the same period.

The company is backed by including , Tiger Global, and Sequoia Capital. SoftBank has set up at least three SPACs since December, potentially with a view to taking some of its portfolio companies public.

Source: AG Funder News – Indian online grocer Grofers said to seek SPAC deal after stalled M&A talks