Indian food-delivery firm Zomato is set to buy local grocery-delivery startup Blinkit for US$568.16 million in an all-stock deal, in a bid to step up its game as competition in the quick-delivery market gets fierce.
Rivals Swiggy, Reliance Industries-backed Dunzo, Tata-backed BigBasket and Zepto are also betting on fast deliveries in the so-called quick commerce sector, which was worth $300 million last year and is expected to grow 10-15 times to $5 billion by 2025, according to research firm RedSeer.
Zomato in August bought a more than 9 per cent stake in Blinkit for nearly $66.16 million and said earlier this year it would invest as much as $400 million in the Indian quick commerce market over the next two years.
Blinkit’s gross order value in May stood at $51.5 million, Zomato said in a letter to shareholders.
Formerly known as Grofers, SoftBank Group-backed Blinkit rebranded itself late last year as its chief promised to speed up deliveries of everything from groceries to electronics in a burgeoning market dominated by Walmart’s Flipkart and Amazon’s local unit.
Blinkit, which operates in more than 20 Indian cities, delivers products ranging from milk, fruits and vegetables to electronics.
Zomato, backed by China’s Ant Group, did not divulge details on the size of the latest stake.
The company reported a wider loss for the March quarter compared to a year earlier. Still, it said average monthly transacting customers were at a historic high of 15.7 million in the fourth quarter, up from 15.3 million in the previous quarter.
It said it would also buy the warehousing and ancillary services business from Blinkit’s parent company Grofers International for up to 607 million rupees.
- Reporting by Rama Venkat in Bengaluru; Editing by Shinjini Ganguli, of Reuters.