Deepinder Goyal-led Zomato to infuse Rs 300 crore in 10-min grocery delivery company Blinkit

Deepinder Goyal-led food delivery company Zomato is investing Rs 300 crore in 10-minute grocery delivery startup Blinkit.

Zomato's investment in Blinkit now totals Rs 2,300 crore since it acquired the company in August 2022, according to a regulatory filing made with the Registrar of Companies (RoC).

How has Blinkit’s performance evolved?

Blinkit, previously known as Grofers, was acquired by Zomato in a distress sale for Rs 4,447 crore. Initially, the acquisition was seen as a rescue act, which led to a 20% plunge in Zomato’s shares.

However, Zomato remained optimistic, and Blinkit's performance has since significantly improved. Blinkit’s revenues more than doubled to Rs 2,302 crore in fiscal 2024 from Rs 1,064 crore in FY23, with its adjusted EBITDA loss reducing substantially.

Competitive pressures

The quick commerce space is becoming increasingly competitive. Blinkit is vying with Swiggy Instamart, Zepto, and Tata BigBasket. Swiggy, which is preparing for an IPO, announced a $700 million investment in Instamart.

Zepto is raising $300 million in fresh funding, and Flipkart is also setting up its quick commerce business after failed talks to acquire Zepto. 

Quick commerce growth

Quick commerce involves delivering groceries and other items within 10 minutes. Initially focusing on essentials like milk and vegetables, it has expanded to include categories such as fashion and home decor.

The expansion is paying off, as evidenced by Blinkit’s enhanced performance and increased valuation. According to Goldman Sachs, Blinkit’s implied valuation has soared to $13 billion from $2 billion in March 2023.

Investing in Zomato Entertainment

In addition to the Rs 300 crore for Blinkit, Zomato is investing Rs 100 crore in its subsidiary, Zomato Entertainment, which handles live events and ticketing.

The diversified approach shows Zomato’s intent to grow beyond food delivery. Blinkit aims to increase the number of dark stores to 1,000 by March 31, 2025, and diversify product categories to compete with larger online marketplaces like Amazon and Flipkart.