Amazon in talks with Swiggy to buy Instamart business: Report

E-commerce giant Amazon has approached Swiggy and shown interest in Instamart’s fast-paced retail business, says a report in the Economic Times, citing three sources aware of the matter. However, there is no official offer for the tablet yet, with the report stating that early discussions paint a dim chance of a deal being finalized, given the complicated structure of the deal in its current form.

“Amazon has thrown its weight behind it with interest to either acquire a stake in the ongoing pre-IPO offering or make a buyout offer for Instamart… but there are a lot of hurdles as of now,” the source said in an Economic Times report.

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The report notes that early discussions did not suggest a high chance of the deal succeeding, given the complicated nature of the transaction in its current form. Swiggy is reportedly unlikely to sell just its quick commerce business, while Amazon is not interested in entering the food delivery space.

Moreover, given that Amazon does not have a habit of taking minority stakes, the deal, which is estimated to be worth between $10 billion and $12 billion, would be prohibitively expensive for the e-commerce giant.

The report noted that Amazon’s India team has been working on launching its own fast commerce initiative for months, but launching a separate vertical would require global approval as the company does not offer the service in any other global market.It is worth noting that another ET report from earlier this year had stated that Flipkart had tried to strike a similar deal with Swiggy last year, but the talks fell through due to valuation discrepancies.

Swiggy had filed its draft tracking prospectus (DRHP) for its IPO with the Securities and Exchange Board of India (Sebi) through a confidential filing route in April this year. Last week, the company rolled out a $65 million ESPO liquidity programme at a valuation of $65 million.