Zomato will acquire Blinkit in an all-stock deal and the transaction is expected to close in early August this year
Zomato Hyperpure, the restaurant supplies grocery subsidiary, will acquire the warehousing and ancillary services business of Hands on Trades Private Limited for INR 60.70 Cr
Zomato plans to keep the Blinkit app and brand separate from Zomato post-acquisition
Food delivery startup Zomato’s board on Friday (June 24) approved the acquisition of quick commerce startup Blinkit for INR 4,447 Cr in an all-stock deal.
The transaction is expected to close in early August this year.
“We are proposing to acquire Blinkit, a quick commerce business in India and where we first invested in August last year. This foray into the next big category is timely as our existing food business is steadily growing towards profitability,” Zomato founder and CEO Deepinder Goyal said.
Besides, Zomato Hyperpure, the restaurant supplies grocery subsidiary, will acquire the warehousing and ancillary services business of Hands on Trades Private Limited for INR 60.70 Cr.
Zomato plans to keep the Blinkit app and brand separate from Zomato post-acquisition.
The talks about the acquisition were on for some time. In March, Blinkit had raised a loan of $150 Mn from Zomato, while the food delivery startup also invested $100 Mn in equity.
“The interest rate for the loan will be 12 per cent p.a. or higher with a tenor of not more than 1 year. This loan will support the capital requirements of GIPL (Grofers India Private Limited) in the near term and is in line with our stated intent of investing up to $400 Mn cash in quick commerce in India over the next 2 years,” Zomato had said then.
Explaining how Blinkit fits into Zomato’s business, Goyal said that the quick commerce startup is also a hyperlocal business, just like food delivery, and caters to the need for quick delivery of products for customers.
“Quick commerce will help us increase the customer wallet share spent on our platform and also drive higher frequency and engagement from our customers,” he added.
The proposed acquisition targets have a net debt of about INR 6,731 Mn as on the date of signing, Zomato said in a statement.
Zomato’s net loss widened to INR 1,222.5 Cr in FY22 from INR 816.4 Cr in FY21. In May this year, Blinkit had a gross order value (GOV) of INR 4,028 Mn, about one-fifth of Zomato’s monthly average food delivery GOV of INR 5,850 Cr in the fourth quarter of FY22.
Shares of Zomato closed 1.37% higher at INR 70.50 on Friday on the BSE.
