New Delhi: Food delivery platform, Zomato has agreed to buy instant grocery company Blinkit in an all-stock deal for Rs 4,447 crore ($569 million), as it caters to the fast-growing market for quick grocery deliveries. tries to cash in.
According to a regulatory filing, Zomato will offer 62.9 million shares, representing a 6.88 per cent ownership stake, on a fully diluted basis, at an allocation price of Rs 70.76 per share. Before the announcement of the transaction, Zomato shares closed 1.15 per cent higher at Rs 70.35 on the BSE. Read More: SBI Customers Alert! UPI services will remain closed during these hours
HOTPL, Blinkit’s storage and ancillary services business, was also acquired by Zomato for $8 million. However, it will not acquire the B2B trading firm as it no longer fits into its strategic ambitions, according to the company. Read more: Gold Rate Today, June 25: Check Gold Rate in Delhi, Patna, Lucknow, Kolkata, Kanpur, Kerala and other cities
According to a report, Japan’s SoftBank, which holds 46 per cent stake in Blinkit, will acquire 3.2 per cent ownership in Zomato as part of the purchase. Tiger Global Management will own about 1.3 per cent of Zomato, with Sequoia Capital owning an additional 0.5 per cent.
Other Blinkit (formerly Grofers) investors who stand to acquire new Zomato shares include Korea’s KTB Ventures, Yuri Milner’s Apollet Asia and Bennett Coleman & Co Ltd.
The Blinkit acquisition highlights the hyper-competitive and cash-hungry character of the fast commerce industry. Blinkit was one of about 40 unicorns born in India last year. A unicorn is a startup that has a valuation of $1 billion or more.
“While the statutory lock-in period is six months, we have negotiated a lock-in period of 12 months to sell Blinkit stockholders,” Zomato said.
In a blog post, Zomato founder and CEO, Deepinder Goyal said that rapid commerce has been the company’s strategic objective since last year, when it first invested in Blinkit. “This market has grown significantly, both in India and abroad, as customers find great value in quick delivery of groceries and other necessities.” The company is also synergistic with our core food business, providing long-term benefits to Zomato.”
Dhindsa will continue to be the market leader in Rapid Commerce. The transaction is expected to close in August.
The agreement will provide support to Blinkit as competition in increasingly commerce has increased. Earlier this year, Blinkit reportedly fired employees, closed dark storefronts and delayed some vendor payments.
According to Zomato, Blinkit’s losses declined dramatically between January and May as a result of operating leverage and better execution.