Amazon in Negotiations with Swiggy Over Instamart Acquisition

Amazon India has reportedly approached Swiggy regarding a potential deal involving its quick commerce business, Instamart. One insider revealed, “Amazon has shown interest in, either acquiring a stake in the ongoing pre-IPO placement or proposing a buyout for Instamart. However, there are multiple roadblocks at the moment.” The report suggests that early discussions might not lead to a transaction due to the complex deal structure. There is currently no official offer on the table, and as the talks progress, Amazon will need to act swiftly.

A source informed, “Swiggy is unlikely to sell only its quick commerce business, and Amazon is not interested in the food delivery sector, where growth is starting to plateau. Acquiring the entire company would be too costly, valued at nearly USD 10-12 billion. Additionally, Amazon typically doesn’t acquire minority stakes.”

Moreover, Amazon's interest in Instamart aligns with its ongoing efforts to develop its quick commerce initiative, according to the report. Previously, Flipkart had explored a similar deal with Swiggy last year, but talks were unsuccessful due to a valuation mismatch. Flipkart was also reportedly in discussions with Zepto for an acquisition.

Notably, a source quoted in the report suggested that Amazon's decision could be driven by the need to stay competitive in the e-commerce market. "After more than a decade of operating horizontal e-commerce and building massive infrastructure, large online players are still primarily dependent on the top markets for the bulk of their sales. The entry of newer players has been a significant concern, leading them to consider acquiring these assets," the source said.