Zomato Invests Rs 500 Cr in Blinkit to Strengthen Quick Commerce Presence

Gurgaon-based Zomato has invested Rs 500 crore in its quick commerce business, Blinkit, according to a regulatory filing with the Registrar of Companies (RoC). This move highlights Zomato's continued focus on expanding its retail footprint in India’s competitive quick commerce sector.

With this latest investment, Zomato has allocated Rs 2,800 crore to Blinkit since acquiring the company in August 2022. Blinkit, formerly known as Grofers, was acquired by Zomato in an all-stock deal valued at Rs 4,477 crore. The investment follows Zomato's Rs 8,500 crore fundraising through a qualified institutional placement (QIP) in November, aimed at strengthening its balance sheet amid rising competition in the retail and hospitality sectors in India.

Blinkit faces competition from major players like Swiggy’s Instamart, which went public in November, and Zepto, backed by Lightspeed, which raised $1.3 billion last year. Swiggy also secured Rs 4,500 crore in primary capital through its initial public offering (IPO). Zomato did not provide comments on this development at the time of publishing.

Other competitors in India’s quick commerce market include Walmart-owned Flipkart with its Minutes service and Tata Digital-backed BigBasket. Amazon has also entered the retail space, intensifying competition.

Blinkit is aggressively expanding, targeting 1,000 dark stores by March this year and 2,000 micro warehouses by December 2026. The company also recently launched Bistro, a 10-minute food delivery platform competing with Swiggy’s Snacc and Zepto Cafe.

For the July-September quarter, Blinkit reported revenue of Rs 1,156 crore, marking a 129 percent year-on-year increase. The company reduced its EBITDA loss to Rs 8 crore during this period from Rs 125 crore in the same quarter of the previous year.

Before its full acquisition in 2022, Zomato held a 9 percent stake in Blinkit. In June 2021, Blinkit raised $120 million from Zomato and Tiger Global, achieving unicorn status. In March 2022, Zomato invested $100 million in Blinkit via convertible notes and extended a $150 million loan the same month.

However, a January 6 report by brokerage firm Jefferies downgraded its outlook on Zomato’s stock, citing concerns over maintaining profitability amid growing competition in quick commerce.

“We find the Blinkit team the best in class and hence there is no significant risk to its market leadership in the medium term. However, the franchise will face issues on profitability and may not be able to achieve consensus’ estimates on profitability, in our view,” Jefferies stated.