Zomato has invested Rs 500 crore in its quick commerce arm, Blinkit.
Blinkit, the leading player in the quick commerce market, has recently received a fresh capital infusion of Rs 500 crore from its parent company Zomato. This information was disclosed in filings submitted to the Registrar of Companies (RoC) and sourced via Tofler. This investment comes at a time when competition in the rapid grocery delivery sector is heating up.
The company’s board approved the issuance of 2,537 equity shares at a price of Rs 19,70,181 each, totaling nearly Rs 500 crore. This brings Zomato’s total investment in Blinkit to approximately Rs 2,800 crore.
This funding follows Zomato’s successful Rs 8,500 crore (over $1 billion) fundraise through a Qualified Institutional Placement (QIP) in late November last year. A significant portion of these funds, amounting to Rs 2,137 crore, was earmarked for expanding Blinkit’s operations, including investments in dark stores and warehouses.
In June of the previous year, Blinkit received a similar capital infusion of Rs 300 crore. Zomato has emphasized that Blinkit is a crucial business division and is poised to surpass its core food delivery business in size. In fact, Blinkit’s implied valuation exceeded that of Zomato’s food delivery business as of April 2023.
The firm currently dominates the quick commerce market with a commanding 46 percent share, surpassing competitors Zepto and Swiggy Instamart, who hold 29 and 25 percent of the market, respectively, as reported by Motilal Oswal.
Blinkit’s rise to prominence in the quick commerce sector marks a significant turnaround from its tumultuous past, culminating in its acquisition by Zomato in 2022 for a staggering $568 million (Rs 4,477 crore).
In recent times, Blinkit has accelerated its expansion efforts, appointing former Flipkart executive Vipin Kapooria as its chief financial officer and unveiling plans to establish a total of 2,000 dark stores by the end of 2026.
Rivals in the industry have also intensified their expansion strategies. Swiggy Instamart introduced a dedicated app for quick commerce, while Zepto’s CEO Aadit Palicha reported a threefold increase in the firm’s annualized gross order value (GOV) to approximately $3 billion (~Rs 24,500 crore) over the past eight months.
For perspective, Blinkit’s annualized GOV slightly exceeds Zepto’s at around Rs 24,528 crore as of Q2 FY25.
Quick commerce players have expanded beyond traditional grocery offerings to include 15-minute food delivery services. Blinkit recently launched a standalone app, Bistro, for 10-minute food deliveries to directly compete with Zepto Cafe, Swiggy’s Instacafe/Bolt, and other industry players.
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