Online food delivery startup Swiggy said it has acquired LYNK Logistics Ltd, a tech-led FMCG retail distribution company, marking its foray into food and grocery retail market.
The company did not disclose the financial details of the deal. Avendus Capital was the sole financial advisor to LYNK and its shareholders on this transaction.
“LYNK will continue to operate as an independent business post the acquisition led by cofounder and CEO Shekhar Bhende,” the company said in a statement.
Founded in 2015 by Abinav Raja and Shekhar Bhende, LYNK helps fast moving consumer good (FMCG) brands grow their retail presence through its network of more than 100,000 stores across the top eight cities of India. The company has grown more than 2 times year-on-year with improved profitability, the release said.
LYNK leverages a proprietary, integrated technology platform to power retail distribution value chain across warehousing, inventory management and logistics operations. It works with leading FMCG brands as an authorized distributor, connecting them to retail stores and offering a one stop solution to achieve their sales and growth goals. It also offers faster order-to-delivery turnaround and improved on-the-shelf availability through better fill rates to retail stores enabling them to increase sales and serve their customers better.
The Indian retail market is among the world’s largest and fastest growing, estimated to be more than $570 billion in size and expected to grow at 8% year-on-year.
Post-acquisition, LYNK will leverage Swiggy’s strength in technology and logistics to rapidly scale their existing platform.
“LYNK is uniquely positioned in the retail distribution space with their brand-first, tech-led operating model and has demonstrated success with multiple FMCG brands. Our experience in supply chain and logistics gives Swiggy the unique opportunity to help LYNK scale up their offerings and empower retailers to serve their customers better,” said Sriharsha Majety, chief execuitve, Swiggy.
In May, in a blog post announcing company’s annual performance, Majety had said that the group was eyeing profitability for its quick commerce division, which is going to be the back-end of the entire retail play that it has planned.
The online food deliveyy firm has also made “strong progress” on the profitability of its quick-commerce business under Instamart, Mint had reported. “We’re on track to hit contribution neutrality for this three-year-old business in the next few weeks,” Majety had said then.
“Over the last few years, we have focused squarely on helping FMCG brands to meet their retail ambitions. Given our rapid growth, we believe we are uniquely placed to lead the digitization of retail distribution in India. With Swiggy, we now hope to further accelerate our growth and double down on the tremendous opportunity before us,” said LYNK’s Bhende.
Swiggy has been on an acquisition spree and have been looking for growth opportunities through companies that feed well into its ecosystem. Last year, it bought Dineout, an online restaurant booking app. Before that it had acquired companies such as Kint and Scootsy, among others.
“We believe that such synergistic M&A transactions will increasingly drive strategic value unlocking and growth opportunities for tech companies,” added Varun Gupta, managing director, Digital and Technology Investment Banking, Avendus Capital.