 "Zomato, Zomato stock, Food delivery")
Food delivery platform Zomato will invest Rs 300 crore in its quick commerce business Blinkit, according to regulatory filings sourced from Tofler.
Zomato’s total investment in Blinkit, which it acquired in 2022 for $569 million in an all-stock deal, will rise to Rs 2,300 crore. It will separately invest Rs 100 crore in Zomato Entertainment, which is in the live events and ticketing business.
Zomato, after announcing results for the fourth quarter (Q4) of FY24 had said that Blinkit will expand its store footprint to 1,000 by the end of FY25. It had 526 stores as of March 31, 2024 and added 75 in Q4.
Zomato wants to quickly expand Blinkit and reach more places in the country. The quick commerce company’s growth is driven by one city: Delhi National Capital Region (NCR). Blinkit’s gross order value (GOV) from Delhi was Rs 1,748 crore, compared to Rs 485 crore in Bengaluru. The average of the next six cities was Rs 193 crore.
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Competition is heating up in the quick commerce business. Swiggy, which is Zomato’s closest rival, is working on its initial public offering. Mumbai-headquartered Zepto is looking to raise more funds and Flipkart, the e-commerce giant, has announced it will enter the quick commerce segment.
This investment marks Blinkit’s growing significance for Zomato’s business. In 2021, Zomato acquired a 9 per cent stake in Blinkit (then known as Grofer) for $100 million. Zomato fully bought the company the next year.
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Deepinder Goyal, the chief executive officer of Zomato, had then said quick commerce was the firm’s priority due to its growth potential.
Blinkit’s GOV doubled to Rs 4,027 crore in Q4 FY24 from Rs 2,046 crore in the same quarter the year before. It grew 13.7 per cent sequentially. The GOV of the food delivery business grew 28 per cent at Rs 8,439 crore. Sequentially, it declined by 0.6 per cent.
