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Zomato Pumps Rs 500 Crore into Blinkit to Boost Quick Commerce Growth

Food delivery giant Zomato has invested Rs 500 crore (approximately $60 million) in its quick commerce arm, Blinkit, underscoring its commitment to expanding its footprint in the competitive quick commerce market. This new capital injection raises Zomato’s total investment in Blinkit to Rs 2,800 crore since acquiring the startup in 2022.

Blinkit Secures Rs 500 Crore Through Equity Issuance

According to a regulatory filing with the Registrar of Companies, Blinkit’s board approved a resolution to issue 2,537 equity shares at a price of Rs 19,70,181 per share. The funds are expected to fuel Blinkit’s growth ambitions as it continues scaling operations and refining its delivery capabilities.

This funding comes on the heels of Zomato’s own financial strengthening. Two months ago, Zomato raised Rs 8,500 crore via a Qualified Institutions Placement (QIP). The move was aimed at supporting business expansion, including strategic investments in Blinkit, which has emerged as a key component of Zomato’s overall strategy.

Zomato and Blinkit

A History of Steady Investment in Quick Commerce

Zomato’s latest funding marks its second major infusion into Blinkit in less than a year. Back in June 2024, the company invested Rs 300 crore ($36 million) into Blinkit, demonstrating sustained confidence in the platform’s potential.

Blinkit, formerly Grofers, was acquired by Zomato in a landmark all-stock deal worth Rs 4,477 crore ($568 million). Since the acquisition, Blinkit has undergone a transformation, integrating with Zomato’s ecosystem while focusing on rapid grocery deliveries and enhancing customer experience.

Revenue Growth Fuels Confidence

Zomato’s financial performance in recent quarters has provided a solid foundation for its investments in Blinkit. During the second quarter of FY25, Zomato reported a stunning 68.5% quarter-on-quarter growth in operating revenue, reaching Rs 4,799 crore compared to Rs 2,848 crore in Q2 FY24. Moreover, the company posted a 4.8X increase in net profit, totaling Rs 176 crore by the end of September.

Blinkit’s contribution to this growth has been significant. The quick commerce segment’s revenue from operations skyrocketed by 129% year-on-year in Q2 FY25, reaching Rs 1,156 crore from Rs 504 crore in Q2 FY24. Blinkit’s gross order value (GOV) surged, driven by higher order frequencies and the expansion of its store network.

Strategic Implications of the Investment

The latest infusion signals Zomato’s strategic intent to fortify its position in the quick commerce sector. Blinkit has been pivotal in addressing consumer demand for fast delivery of groceries and essentials, an area experiencing fierce competition from rivals like Swiggy Instamart, BigBasket, and Zepto.

While the sector has witnessed rapid growth, it has also faced challenges such as high operational costs and thin margins. With Zomato’s backing, Blinkit is well-positioned to navigate these hurdles, leveraging economies of scale and advanced logistics.

What’s Next for Blinkit?

  • Continued focus on expanding its store network and geographical reach.
  • Enhancing operational efficiency to improve delivery times and cost structures.
  • Strengthening integration with Zomato to offer seamless experiences for customers across platforms.

As Zomato continues to build momentum, Blinkit’s rapid growth could be a key differentiator in the quick commerce race. However, sustained profitability remains a challenge that both companies must address in the coming years.

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