With the latest investment, Zomato has injected Rs 2,800 crore in Blinkit since it acquired the company in August 2022. Formerly known as Grofers, Blinkit was acquired by Zomato for Rs 4,477 crore in an all-stock deal.
The latest investment comes on the back of Zomato raising Rs 8,500 crore through a qualified institutional placement (QIP) in November, which it had said would be to strengthen its balance sheet in an intensifying competitive scenario.
Blinkit is facing heat from rivals including Swiggy, which runs Instamart, and went public in November, and Lightspeed-backed Zepto, which raised $1.3 billion last year. Swiggy raised Rs 4,500 crore in primary capital via its initial public offering (IPO).
Zomato did not respond to queries at the time of publishing.
The quick commerce space also includes the likes of Walmart-owned Flipkart, which runs Minutes, and Tata Digital-backed BigBasket. Global ecommerce giant Amazon has also entered India’s quick commerce market, ET has reported.
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In addition to facing competition, Blinkit is also undertaking a massive expansion exercise aiming to operate 1,000 dark stores by March this year, and 2,000 such micro warehouses by December 2026.Blinkit also recently announced its foray into food delivery with Bistro — a 10-minute food delivery platform, which the company plans to scale up. Bistro competes with Swiggy’s Snacc and Zepto Cafe, which are being expanded as well.
Blinkit had reported Rs 1,156 crore in revenue for the July-September quarter, up 129% year-on-year. It posted Ebitda loss of Rs 8 crore during the three-month period, compared to Rs 125 crore of operating loss in the same quarter in the previous year.
Prior to fully acquiring Blinkit in 2022, Zomato owned a 9% stake in the firm. In June 2021, the grocery delivery platform raised $120 million from Zomato and Tiger Global, turning into a unicorn.
In March 2022, Blinkit raised $100 million from Zomato through convertible notes, and in the same month, the food delivery company extended a loan of $150 million to the delivery startup it later acquired.
A January 6 report by brokerage firm Jefferies downgraded its view on Zomato’s stock, raising concerns over the firm being able to sustain its profitability amid rising quick commerce competition.
“We find the Blinkit team the best in class and hence there is no significant risk to its market leadership in the medium term. However, the franchise will face issues on profitability and may not be able to achieve consensus’ estimates on profitability, in our view,” Jefferies noted.
