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Blinkit is now more valuable than Goyal's Zomato food delivery business, says Goldman Sachs

Sumit Vishwakarma
New Update
Blinkit is now more valuable than Goyal's Zomato food delivery business

Goldman Sachs recently, in a note, said that Blinkit, the quick commerce startup acquired by Zomato in 2022, has surpassed the valuation of Zomato's core food delivery business. 

"We note that Blinkit’s implied valuation in our Zomato’s sum of the parts (SOTP) is (close to) $13 billion now, versus $2 billion in March 2023, with per share implied value of Rs 119 higher than food delivery, at Rs 98, for the first time," the analysts said in a note.

Background and acquisition

Zomato acquired Blinkit for $568 million in what was seen as a rescue act during a period of financial distress for Blinkit, formerly known as Grofers.


The acquisition has proven to be strategically beneficial, with Blinkit's performance-enhancing significantly post-acquisition. Originally, Blinkit was acquired at a valuation downturn from $1 billion to $568 million, reflecting its troubled status at the time.

Financial performance and market expansion

The substantial increase in Blinkit’s valuation from $8 billion to $13 billion by Goldman Sachs is attributed to improved gross order value (GOV) estimates, which are tracking around 50% higher than the previous year's estimates. 

Goldman Sachs highlighted the potential for expansion, noting that quick commerce platforms like Blinkit, currently operational in less than 30 cities, have the potential to expand to 40-50 cities. This could tap into a grocery and non-grocery total addressable market (TAM) of about $150 billion as of CY23.

Industry impact and future outlook

Goldman Sachs projects a 53% compound annual growth rate (CAGR) in Blinkit's GOV from 2024 to 2027. The growth is expected to significantly contribute to a 32% adjusted revenue CAGR for Zomato overall, marking the highest projection among Goldman Sachs’ coverage of food delivery and internet companies in India.

The note further elaborates on the economic structure, stating, "We believe the quick commerce segment can continue taking share from slotted delivery, and reach (around) 70% share of India’s online grocery in 2-3 years, a combination of good balance between pricing and delivery times."

Strengthening Zomato's market positioning

The robust growth of Blinkit enhances Zomato's market positioning and complements its food delivery segment. Deepinder Goyal, founder and CEO of Zomato, previously hinted at the potential for Blinkit to surpass the core food delivery business in scale and profitability.