Zomato buys Blinkit rapid delivery platform for Rs 4,447 cr

New Delhi: Online food delivery platform Zomato announced on Friday that it had acquired fast-trading platform Blinkit for Rs 4,447 crore (about $568 million) in an entirely in stock.

Zomato already held more than 9% of the capital of Blinkit (formerly Grofers).

While the value of Blinkit’s previous deal was around $700 million, Zomato’s declining share price reduced it to $568 million.

“This foray into the next big category comes at a good time, as our existing food business is steadily moving towards profitability,” said Deepinder Goyal, CEO of Zomato.

Zomato has grown at a CAGR of 86% over the past four years to reach adjusted revenue of $710 million “while adjusted EBITDA margin grew from (153%) during the ‘FY19 to (18%) over FY22,’ Goyal added. .

Zomato’s catering supplies subsidiary, Hyperpure, will acquire the warehousing and ancillary services business of Hands on Trade Private Ltd (HOTPL) for Rs 60.7 crore.

Akshant Goyal, CFO of Zomato, said the company is not acquiring the B2B trading business because “it no longer fits strategically with our plans.”

“Our existing investment of Rs 2,228 million in HOTPL is protected by our preferential right of liquidation,” he said.

Blinkit is a fast-paced marketplace that delivers groceries and other essentials to customers in minutes (average delivery time of 15 minutes in May).

Blinkit was rebranded as Grofers after a pivot to fast trading last year. Their old business model was next day grocery delivery.

“Blinkit’s business pivoted to 100% fast trading in January 2022 and since then the company has made tremendous progress on all metrics important and relevant to this business,” Goyal said.

In the month of May 2022, Blinkit achieved a Gross Order Value (GOV) of Rs 4,028 million, which is 1/5th of Zomato’s average monthly food delivery GOV in the fourth quarter of FY22.

In August of last year, Blinkit (then Grofers) raised $100 million from Zomato.

“As a food company, we are already tapping into the great food delivery opportunity in India. On top of that, we now also want to focus on fast trade as a natural extension of our food delivery business,” Goyal said.

“Rapid trading will help us increase the share of customer wallet spent on our platform and also increase the frequency and engagement of our customers,” he added.

Closing of the transaction is expected to occur in early August 2022.

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