Food and groceries delivery aggregator Swiggy on Thursday said it will buy Lynk Logistics, a retail distribution company from listed cements company Ramco Cements, marking a foray into the country’s food and grocery retail market. The size of the deal was kept undisclosed.
As a part of the transaction, Ramco will acquire 24,18,915 compulsory convertible preference shares. Additionally, it will provide representations/warranties/indemnities to Swiggy of up to Rs 86.6 crore.
Lynk, which enables major consumer brands to grow their retail presence through its network, will operate as an independent business after the acquisition.
The deal is expected to be completed by next month, led by Lynk’s chief executive Shekhar Bhende. Avendus acted as the financial adviser to Lynk on this transaction.
“Given our growth, we believe we are placed to lead the digitisation of retail distribution in India. With Swiggy, we now hope to accelerate our growth and double down on the opportunity before us,” said Bhende, co-founder and CEO, Lynk.
This is Swiggy’s third such major investment in the last 15 months. In April 2022, Swiggy led a $175 million round in bike taxi platform Rapido. In May 2022, it acquired table-booking platform Dineout from Times Internet. Swiggy has also made other smaller bets including its investment in restaurant management platform UrbanPiper.
Lynk on the other hand, founded in 2015 by Bhende and Abinav Raja, has a network of over 100,000+ retail stores across eight major cities of India. It works as a distributor for clients including Hindustan Unilever Ltd, Marico, ITC, Lakme, Dabur amongst others, connecting them to kirana stores, leveraging its integrated technology platform to digitise the process.
The deal helps Swiggy enter India’s food and grocery retail market, which is amongst the world’s largest and fastest growing, estimated to be $570 billion in size.
“Lynk is uniquely positioned in the retail distribution space with a brand-first, tech-led operating model,” said Sriharsha Majety, CEO, Swiggy. “Our experience in supply chain and logistics gives us the opportunity to help Lynk scale their offerings and empower retailers to serve customers better.”