Indian Online Supermarket Grofers Eyes Going Public Via SPAC

Grofers, an Indian online grocer, is looking at taking itself public in the U.S. by merging with a blank-check company. Such a move would be part of the intensifying trend of using such a special purpose acquisition company (SPAC).

Bloomberg reported that people familiar with the situation, who did not want to be named as the talks are private, said the SoftBank Vision Fund-backed grocer is working with an adviser. The grocer wants a valuation of about $1 billion, sources said. Bloomberg said that talks are at an early stage, and the company is deciding whether to proceed with a SPAC. A representative for Grofers declined to comment.

Grofer’s website says it is “India’s largest low-price online supermarket.” The service allows customers to “order products across categories like grocery, vegetables, beauty and wellness, household care, baby care, pet care and meats and seafood.” The company said it uses its “in-house technology platform to manage a network of over 5,000 partner stores.” The service covers 27 cities, including Delhi, Mumbai, Pune and Hyderabad.

In May 2019, Grofers raised more than $200 million in a new round of fundraising. The round was led by SoftBank’s Vision Fund. At the time, Grofers said its valuation stood at close to $1 billion.

SPACs are on a roll as companies forego the route of having an initial public offering (IPO). A SPAC, or blank-check company, typically has no commercial operations, but is formed to raise cash and go shopping for an existing company or companies to acquire.

For example, mall owner Simon Property Group has formed a “blank check” company to go on the hunt for “a company or assets with significant growth potential and prospects.” In a press release, Simon said it has filed for an IPO with the goal of raising $300 million for the new entity. Simon owns such properties as the upscale Copley Place in Boston.