Restaurant-finder and food-delivery startup Zomato is reportedly in talks with competitor Swiggy for a merger.
On Wednesday, two media reports said that talks were on between the two companies, but the proposal may not end in a deal.
The Economic Times said that Gurgaon-based Zomato had proposed a stock deal, but Bengaluru-based Swiggy was interested in acquiring the food delivery business of Zomato.
A Zomato spokesperson told VCCircle in an emailed statement that “we will not comment on market speculationsâ€. Swiggy, too, refused to "comment on baseless speculations such as thisâ€.
Zomato, reportedly, is in the middle of raising $200 million from Chinese e-tailing giant Alibaba. It had last raised $60 million (then Rs 390 crore) from Singapore state investment firm Temasek and existing investor Vy Capital in September 2015.
Zomato had narrowed its losses to Rs 389 crore for 2016-17 from Rs 590.1 crore the year before, according to the annual report of its largest shareholder Info Edge (India) Ltd. The company had posted revenues of Rs 332.3 crore, up 81% from Rs 183.9 crore in 2015-16.
Last month, Bundl Technologies Pvt. Ltd, which operates Swiggy, had appointed former Britannia Industries executive Rahul Bothra as its chief financial officer.
Swiggy is a heavily funded player in the online food delivery space, having raised $155 million so far from the likes of Naspers, Bessemer Venture Partners, Accel India, SAIF Partners and Norwest Venture Partners.
In January 2016, it raised $35 million in Series C funding, followed by a $15 million infusion in a Series D round in September last year.
The startup was founded in August 2014 by Sriharsha Majety, Nandan Reddy and Rahul Jaimini. Majety and Reddy are BITS-Pilani alumni while Jaimini is an IIT-Kharagpur alumnus.
Swiggy had posted losses of Rs 137 crore on total income of Rs 23.6 crore in 2015-16. It recorded net sales of Rs 20 crore during the period.
Last week, another media report had suggested that e-commerce biggie Flipkart was in talks with Swiggy for a buyout or an investment. Both Flipkart and Swiggy count Naspers and Accel India as investors.