Indian food delivery firm Zomato will be conducting an all-stock merger with Blinkit which will value the instant-delivery service between $700 million and $750 million, Reuters reported Tuesday (March 15).
Zomato said it would be loaning as much as $150 million to Blinkit for the startup’s near-term capital needs. Blinkit, formerly known as Grofers, is also backed by SoftBank.
Last August, Zomato acquired over 9% stake in Blinkit for almost $68 million. Earlier this year, Zomato also said it would be investing as much as $400 million to the Indian quick commerce market for the next two years.
Reuters noted that Blinkit rebranded itself in late 2021, with its CEO promising speedier deliveries of everything from electronics to groceries while working in a blooming market dominated by larger firms like Amazon and Walmart’s Flipkart.
PYMNTS reported that Zomato didn’t have the best third-quarter results, which caused shares to fall by around 9% in early February.
There was a 1.7% uptick in sequential gross order value, with pandemic restrictions easing and in-person dining coming back a bit, and the total gross order value was up 84.5% year over year.
See also: Shares Tumble as Zomato Delivers Lukewarm Q3 Results
Zomato’s shareholder letter blamed the weak quarter growth on “reduction in customer delivery charges … in addition to a soft impact of post-COVID reopening (including some shift from delivery to dining out).”
The company did roll out operations in 180 new cities and offered free delivery as a way to hopefully add more consumers, and is now operating in over 700 cities in total.
According to the financial report, consumer delivery charges have “grown steadily as a strong validation of the convenience that our platform offers,” and that with the big size of customer delivery charges, Zomato figured it could use that to drive more growth.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More