If you thought that deal-making in India has gotten less exciting after Walmart’s acquisition of Flipkart, think again. SoftBank is exploring a potential investment in Gurugram-based food delivery service startup Zomato and reportedly held talks with it earlier this week according to an ET article, citing three people aware of the discussions. The report added that the discussions are at a “very preliminary stage”.

SoftBank, which is likely to take a call on this by year-end, is looking to invest something in the range of $200-400 Mn in India’s food delivery sector. Zomato’s talks with SoftBank reportedly touched on three main business lines, including the startup’s international expansion plans over the next few years.

In November, it was reported that SoftBank was looking at a possible investment of $200 Mn-$250 Mn investment in Zomato’s arch-rival Swiggy but, apparently, the latter felt it was too early to be raising money from the Japanese conglomerate. In the same month, it was also reported thatZomato and Swiggy might go in for a merger, creating a virtual monopoly in the food delivery space. These plans never materialised as the talks broke down over valuation concerns.

If valuation were a concern, then it’s become even more of a problem after Swiggy raised $100 Mn in Series F funding round led by Naspers with participation from Meituan-Dianping, one of China’s largest service ecommerce platforms.

This was followed by news that it was in talks with Hong Kong-based VC firm DST Global for a proposed investment of more than $200 Mn which would peg its valuation at more than $1 Bn. It’s also important to note that the reported merger between the two is still on the cards and cannot be ruled out.

The Indian ecommerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second largest ecommerce market in the world by 2034, according to the Indian Brand Equity Foundation.

SoftBank has made big moves in the cab aggregator space as well, with Ola, and the ecommerce space with Flipkart, and it will come as no surprise if it picks up a stake in the food delivery business. Earlier, Inc42 reported that SoftBank is exploring other ways of retaining a foothold in Indian ecommerce and is reportedly considering an investment in Paytm Mall.

Even as SoftBank ponders which company it wants to pick, the development is bound to intensify competition between Zomato and Swiggy, which have a duopoly in the food delivery sector in the country.

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