instant grocery delivery
Zomato has acquired Blinkit, a struggling 10-minute grocery delivery startup, in a $568.1 million all-stock deal as the loss-making food delivery firm looks to broaden its offerings at a time when its shares are trading far below last year’s debut price and less than half of the all-time highs.
The Gurgaon-headquartered firm — which reached an agreement to acquire Blinkit earlier this year, TechCrunch previously reported — said on Friday its shareholders have approved the deal (PDF). The deal marks a significant value erosion in Blinkit, which became a unicorn a year ago and had raised about $700 million mostly against equity. When the two firms agreed for an acquisition earlier this year, they had valued the deal between $700 million and $750 million, TechCrunch earlier reported.
The acquisition comes as a relief to Blinkit, which struggled to raise funds from new and most of its existing investors for several quarters.
The SoftBank-backed startup, which was formerly called Grofers, pivoted to instant grocery delivery last year. Blinkit shut many of its dark stores and scaled down the business in many cities earlier this year and pledged to focus more aggressively on 10-minute grocery deliveries. The startup said if its orders can’t reach the customers in 10 minutes, it will not serve in those cities.
In Blinkit, Zomato will find a partner that can help fuel its instant grocery delivery play — or grocery altogether, two areas Zomato has previously attempted to sink its teeth in but failed each time.
“Quick commerce has been our stated strategic priority since the last one year. We have seen this industry grow rapidly both in India and globally, as customers have found great value in quick delivery of groceries and other essentials. This business is also synergistic with our core food business, giving Zomato the right to win in the long term,” Zomato chief executive Deepinder Goyal said in a statement.
Blinkit competes with younger and heavily backed firm Instamart of Swiggy, which also counts SoftBank among its investors, and YC Continuity-backed Zepto. Zomato, a much older firm than all the other aforementioned names, competes with Swiggy, which in the private market has more than twice the valuation of Zomato.
Swiggy, which is looking to go public next year, said earlier this year that it will invest $700 million in its instant delivery service, called Instamart.
instant grocery delivery