Zomato Invests ₹500 Crore in Blinkit

Zomato has made a significant move by investing an additional ₹500 crore in Blinkit, its quick commerce arm. This latest infusion has brought Zomato’s total investment in Blinkit to ₹2,800 crore since its acquisition of the company for ₹4,477 crore in August 2022. This recent investment comes on the back of a ₹300 crore injection made in June 2023.

Zomato’s Strategy to Strengthen Blinkit’s Growth

This investment follows Zomato’s successful raising of ₹8,500 crore through a qualified institutional placement (QIP). The funds raised through the QIP are being utilized for strengthening Zomato’s balance sheet and expanding Blinkit’s footprint in the face of intense competition in the quick commerce sector.

Blinkit’s Expansion and Market Share

Currently, Blinkit commands a 45% market share in the quick commerce segment. Additionally, the company boasts the highest gross order value (GOV), exceeding $3 billion. In order to maintain its leading position in the market, Blinkit is ramping up its expansion plans. This includes an increase in the number of dark stores and warehouses. To accelerate this growth, ₹2,137 crore of the QIP proceeds have been allocated specifically for Blinkit’s expansion, with a focus on strengthening its supply chain infrastructure.

Blinkit’s Strategies to Combat Competition

In a bid to stay ahead of its competitors, Blinkit is diversifying its offerings and expanding into tier-II cities. The company is focused on SKU (stock-keeping unit) expansion and has begun offering high-value products such as laptops on EMIs. This expansion into higher-value products will help Blinkit diversify its portfolio, beyond the traditional quick commerce goods.

Blinkit’s New Initiatives

In addition to its SKU expansion, Blinkit has recently launched new initiatives to diversify its business. The company has entered the quick food delivery segment through its new standalone app, Bistro. It has also launched a 10-minute ambulance service, broadening the scope of its services beyond just grocery and essentials delivery.

Blinkit’s Vision for the Future

Blinkit has set an ambitious goal of opening 2,000 dark stores by the end of 2026. The company aims to expand its presence and further solidify its leadership in the quick commerce industry. To strengthen its leadership team, Blinkit has appointed Vipin Kapooria, a former Flipkart executive, as its Chief Financial Officer (CFO). This leadership change is seen as a strategic move to streamline Blinkit's financial operations and aid in the execution of its ambitious expansion plans.

Zomato’s Long-Term Vision for Blinkit

Zomato sees Blinkit as a crucial growth driver in its business portfolio. The company believes that Blinkit could become a larger business than Zomato’s core food delivery operations. Blinkit’s rapid growth and expansion have already made it a formidable player in the quick commerce sector. In fact, Blinkit’s implied valuation surpassed Zomato’s in April 2023, reflecting the immense potential of the quick commerce business.

Conclusion

Zomato's continued investment in Blinkit underscores its commitment to the growth and expansion of its quick commerce arm, positioning the company to dominate the rapidly evolving sector. With Blinkit’s ambitious plans to open 2,000 dark stores by 2026, diversify its product offerings, and expand into new markets, the future looks promising. The infusion of funds, along with strategic initiatives such as the launch of Bistro and high-value product offerings, indicates Blinkit’s readiness to stay ahead of competitors like Zepto and Swiggy Instamart. Zomato's strategic focus on Blinkit also highlights its belief in the potential of quick commerce, with Blinkit emerging as a key growth driver, potentially surpassing Zomato's core food delivery business in the future.