Foodtech giant Zomato is set to inject Rs 300 crore ($36 million) into its quick commerce arm, Blinkit. This strategic investment aims to bolster Blinkit’s competitive edge against rivals Swiggy Instamart and Zepto. Additionally, Zomato will allocate Rs 100 crore ($12 million) to Zomato Entertainment, a subsidiary overseeing the company’s live events and ticketing operations.
Zomato’s board has approved the resolution to invest Rs 300 crore in Blinkit Commerce and Rs 100 crore in Zomato Entertainment, according to a regulatory filing accessed from the Registrar of Companies. With this latest funding, Zomato’s total investment in Blinkit reaches Rs 2,300 crore ($277 million) since its acquisition in August 2022. Blinkit, formerly known as Grofers, was acquired by Zomato in an all-stock deal valued at Rs 4,477 crore ($568 million).
The fresh capital infusion comes on the heels of Zomato’s Q4 results, which highlighted Blinkit’s achievement of EBITDA profitability and a 19.4% increase in revenue, reaching Rs 769 crore in Q4 FY24. Overall, Zomato reported a profit of Rs 175 crore in the last quarter.
The quick commerce sector has seen intensifying competition over the past few years. In late 2021, Swiggy announced a $700 million investment in its quick commerce division, Instamart. Concurrently, Zepto has raised approximately $430 million in three funding rounds and is planning to secure additional capital. E-commerce giant Flipkart is also eyeing the quick commerce market, recently raising $350 million from Google.
Analysts at Goldman Sachs recently indicated that Blinkit holds more value than Zomato itself. Sanjeev Bikhchandani, founder of Zomato’s early backer Info Edge, echoed this sentiment in an interview with Entrackr, asserting that Blinkit is poised to become a significant player in the industry.
These investments underscore Zomato’s strategic focus on diversifying its portfolio and enhancing its competitive position in both the quick commerce and entertainment sectors.
