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Grofers in talks to buy Bengaluru-based SpoonJoy
26 Oct 2015
  • Hyperlocal delivery start-up Grofers is in advanced talks to buy Bengaluru-based SpoonJoy, as the food ordering app struggles to raise money from new and existing investors, the Mint reported, quoting people familiar with the development.


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  • Grofers, run by Locodel Solutions Pvt. Ltd, is expected to sign a so-called acqui-hire deal with SpoonJoy, the sources said. Since acqui-hire is a deal done primarily to access expertise of the acquired firm’s staff, operations of SpoonJoy will be shut down once the deal is done.
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  • “We are currently in discussions with SpoonJoy and hope to complete the transaction in the next few weeks,” confirmed Albinder Dhindsa, co-founder at Grofers.
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  • SpoonJoy declined to comment.
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  • As investor interest starts to ebb in the crowded food ordering sector, the market is expected to see more such consolidation or strategic investments.
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  • Since the start of the year, investors have pumped $150 million into 20 food-ordering (and food-delivery) start-ups.
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  • Food-tech start-up TinyOwl Technology Pvt. Ltd has been cutting jobs and freezing expansion plans, as the company faces delays in closing its next round of funding, three people familiar with the matter said.
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  • Earlier this month, another such start-up, Dazo, decided to shut shop barely a year after it started operations.
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  • The acquisition of SpoonJoy is expected to largely be a stock deal with some component of cash being involved. About 40 people from SpoonJoy are expected to join Grofers in the tech and operations departments.
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  • Dhindsa clarified that the acquisition of SpoonJoy would not mean Grofers’s expansion into the food delivery space. “We are not looking at the food delivery business. Product and food delivery are not compatible businesses,” he said.

 

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