Zomato, Blinkit Sign Deal for Merger

Zomato and Blinkit have signed up for a merger in an all-stock deal, which is likely to be at a down round for a valuation of $700 million. Earlier, Blinkit raised $100 million in a funding round from Zomato, giving it a unicorn status. Zomato will soon be approaching the Competition Commission of India for approval.

The lead investor in Blinkit, Softbank will get around a 4% stake in Zomato following the stock swap. Zomato’s last investment in Blinkit took place for a 10% stake at a valuation of a billion dollars just before its IPO in July last year. 

While Blinkit was supposed to raise a further $500 million from Zomato, this has not materialised due to current market conditions, where new-age tech stocks have been hammered.

Blinkit also signed a term sheet with Innoven Capital for debt worth $10 million, taking place in three tranches. The company received Rs 25 crore in the first tranche last month. 

In an attempt to cut costs, Blinkit laid staff from Mumbai, Hyderabad and Kolkata across segments including riders, pickers and store managers. It has more than 2,000 people on its payroll and 30,000 ground staff.