Online retailer Paytm Mall can buy a large stake in e-grocer company Grofers. Apart from this, the two companies can also be merged. The reason for this is that Japan’s investment group Soft Bank is a major investor in both companies. It is Softbank that is negotiating investment or merger between the two companies. This was stated in the ET report quoting several sources aware of the matter.
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Soft bank does not have fresh capital
According to a source familiar with the matter, SoftBank does not currently have fresh capital. As such, it is pushing for consolidation, investment or merger of Paytm Mall and Grofers. Both companies will do either of these things. Paytm Mall has $ 170 million or about 12 thousand crore rupees in cash and is ready to enter the grocery market. Grossery has emerged as a better opportunity in the e-commerce industry in the nationwide lockdown implemented due to the Corona transition. According to a source familiar with the matter, SoftBank will benefit from bringing the two companies together. This will allow growers access to cash from Paytm for business operations.
There may be disagreement on the terms of the deal
A source said that Softbank wants the growers to use the cash from Paytm Mall and give it back to Paytm. However, the source says that the two companies may disagree on the terms of the deal. The Growers have SoftBank Vision Fund (SVF) investment. Softbank Group (SBG) has an investment in Paytm. SBG holds about 20 per cent stake in Paytm, while another Chinese investment company, Alibaba, has a 35 per cent stake in Paytm Mall in association with Saif Partners. Vijay Shekhar Sharma, founder and CEO of e-Bay and Paytm, is the other shareholder of Paytm. SVF holds more than 40 per cent stake in the growers and is the largest shareholder.
Paytm Mall is Discussing Investment in Milk Basket
According to a source, Paytm Mall is exploring various options in the online grocery segment. For this, Paytm is in talks to invest or acquire in milk delivery startup Milk Basket. Milk Basket is invested by Kalari Capital, Mayfield Benext and Unilever Ventures. However, SoftBank declined to comment on the merger talks of Paytm and Grophers. Grophers milk baskets have also not responded.
