The financial details of the transaction were not disclosed
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NEW DELHI :
SoftBank-backed Swiggy agreed to acquire Times Internet-owned table booking platform Dineout in a deal valued at about $150 million, a person familiar with the matter said.
As part of the transaction, shareholders of Dineout will receive only shares of Swiggy, and there won’t be any cash payout, a second person said. Both requested anonymity as the information is private.
Swiggy and Dineout announced signing a definitive agreement for the deal on Friday but did not disclose financial details.
Swiggy did not respond to an email on the deal value. Ankit Mehrotra, co-founder and chief executive of Dineout, did not respond to a request for comment.
The acquisition will allow Swiggy, run by Bundl Technologies Pvt. Ltd, to diversify its revenue streams by capitalizing on Dineout’s network of over 50,000 restaurant partners in 20 cities. Founded in 2012, Dineout was acquired by Times Internet in 2014 via its TimesCity platform for an estimated ₹60 crore.
Sriharsha Majety, Swiggy’s chief executive officer, said that the acquisition will allow the company to explore synergies and offer new experiences in a high-use category.
“Dineout is a well-loved brand that enjoys loyalty from both consumers and restaurants. Times Internet and the founding team should be credited for the transformational impact they have brought about in the dining out experience through their products, technology and a vast selection of restaurant partners," he said. Mint first reported about the potential deal in February.
After the acquisition, Dineout will continue to run as an independent app. Its founders Mehrotra, Nikhil Bakshi, Sahil Jain and Vivek Kapoor, will join Swiggy.
The four founders had a combined 15-20% stake in Dineout, a third person said, adding that Times Internet owned 75% while employees of Dineout held a 5-10% stake through stock options.
Dineout has 500 employees, who are now part of the deal, the person said.
The Dineout founders “will also work on building out the dining out feature on the Swiggy app over the next few months," the person said. “This was one of the few missing things in Swiggy (that Zomato had). With this deal, Swiggy will also have a full-stack (of options)," he said, adding that Dineout will currently run as an independent company.
The Dineout deal followed Swiggy closing a $700 million funding round in January led by asset management firm Invesco, almost doubling its valuation from its previous fundraising to $10.7 billion. Swiggy had raised $1.25 billion from investors including SoftBank and Prosus in July 2021 at a valuation of $5.5 billion, a 50% jump from the $3.6 billion it was valued in April 2020.
Swiggy’s fundraising and valuation boost come at a time rival Zomato, which got listed last year, has seen a sharp erosion in market value.
New-age technology firms, which got listed last year, have also seen their share prices fall sharply amid geopolitical tension and fears of rate hikes by the US Federal Reserve.
Swiggy has also made financial investments in other startups in the recent past.
Last month, it led a Series D funding round in bike taxi app operator Rapido. Swiggy, along with rival Zomato and other investors, also invested in UrbanPiper Technologies Pvt. Ltd, a restaurant management platform, in April.