Indian food delivery firm Zomato is buying local grocery delivery startup Blinkit for 44.47 billion rupees ($568.2 million) in an all-stock deal as part of its effort to expand its capabilities in the space as the competition becomes more rampant, according to a Reuters report Friday (June 24).
The India quick commerce sector was worth $300 million last year and is expected to grow to $5 billion by 2025, the report said, citing research firm RedSeer.
In August, Zomato bought almost 10% of Blinkit for about $66.2 million and said earlier this year it was planning to invest up to $400 million in the Indian quick commerce space in the next two years. Their purchase of Blinkit exceeded that amount by at least $100 million.
Blinkit’s gross order value in May stood at 4.03 billion rupees (about $51 million), Zomato said on Friday in a letter to shareholders. The company rebranded from Grofers late last year, with management saying it would expedite delivery of groceries, electronics and everything in between. Blinkit operates in more than 20 Indian cities.
Zomato, which is backed by Ant Group, didn’t say how much it paid for its latest Blinkit investment or what percentage of the company it now owns. The company said it will also buy the warehousing and ancillary services business from parent company Grofers International for up to 607 million rupees (about $7.8 million).
Related: Zomato CEO: ‘The Jury is Still Out’ on Super Apps in India
In May, Zomato Co-founder and CEO Deepinder Goyal said he isn’t sure about the future of the super app model in India.
In the U.S., there is some demand for a super app, according to PYMNTS research from the December study, “The Connected Consumer In The Digital Economy: How US Consumers Define the Super App,” which drew from a fall survey of a census-balanced panel of 3,166 U.S. consumers.
The study found that 67% of consumers in the U.S., or 173 million people, would be interested in integrating multiple areas of their digital lives into a single app, and 11% of all consumers, or 27 million adults, see value in having a single place where they can manage all parts of their digital lives.
The most recent edition of PYMNTS’ Provider Ranking of Aggregators, which evaluates food delivery apps based on a proprietary combination of publicly available information plus app usage data to which PYMNTS has access, has Zomato tied for sixth place with Swiggy, ahead of Grubhub, Glovo, and other on-demand delivery providers around the world.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More