India’s online food delivery platform Zomato Ltd. said it will acquire instant grocery delivery service Blinkit for Rs. 4,447 crore.
India’s online food delivery platform Zomato Ltd. said it will acquire instant grocery delivery service company Blinkit for Rs. 4,447 crore (44.47 billion rupees/$568 million), in a bid to expand its business for quick deliveries of groceries and essentials.
The Zomato board on Friday approved the issuance of up to 628.5 million fully paid-up equity shares worth 70.76 rupees each for the stake in the brand known as Blinkit, according to a statement issued by the company to the stock exchanges. Blinkit was formerly known as Grofers India Pvt.
Zomato was among the first generation of Internet unicorns to tap India’s capital market. It raised $1.3 billion via an initial public offering in July 2021. The Blink acquisition is in line with the Zomato’s strategy of investing in the quick commerce business, it said. Zomato shares closed 1.4% higher, before the statement, at 70.5 rupees on Friday, the highest since June 3.
The acquisition of Blinkit’s tech platform, scale of business, third party brands and sellers, and its network of warehouses will help save costs for Zomato, Chief Executive Officer Deepinder Goyal said in a separate statement.
Zomato, backed by Sequoia Capital and Jack Ma’s Ant Group among others, first invested in Blink in August 2021 and plans to keep the Blinkit app and brand separate from itself, Goyal said. The acquisition will help it increase the hyper-local delivery fleet utilization and reduce the cost of delivery, according to the company.
Zomato expects the market for quick deliveries to extend across multiple categories, including beauty and personal care, electronics, over-the-counter pharmaceuticals and stationery, it said. Zomato expects that demand for quick deliveries will grow in large Indian cities in the long term.
Zomato Hyperpure Pvt., a subsidiary of Zomato, has also entered into a business transfer agreement with Hands on Trades Pvt. and others to purchase their warehousing and ancillary services business, the statement said.
Zomato plans to fully acquire Blink Commerce, in which it currently owns about 9%, in addition to the warehousing and ancillary services business of Hands on Trades for a total of 45.08 billion rupees. This will be paid in the form of shares worth 44.47 billion rupees in the parent and another 607 million rupees in cash for acquiring the ancillary unit, it said.