Foodtech major Zomato has reached an agreement to acquire quick commerce platform Blinkit (previously Grofers) for $568 million in an all stock deal. The acquisition marks consolidation in cash-guzzling quick commerce space which counts heavily funded competitors such as Swiggy, Zepto and Dunzo.
The board at Zomato has approved the acquisition of up to 33,018 equity shares of Blink Commerce Pvt Ltd from its shareholders for a total purchase consideration of Rs 4,447.48 crore, the company said in a BSE disclosure on Friday.
According to Zomato’s chief executive Deepinder Goyal, the quick commerce business is also synergistic with its core food business, giving Zomato the right to win in the long term.
This is a 43% haircut in BlinkIt’s valuation as compared to its last round when the company cornered $100 million from Zomato at a valuation of $1 billion. Lately, several media reports also speculated that the two Gurugram-based companies will close the deal at a valuation of $700-800 million.
Founded by Albinder Dhindsa and Saurabh Kumar in 2013, BlinkIt was one of the early bets of SoftBank and Tiger Global in India and its other backers include Sequoia Capital, Euler Fund and KTB Ventures among others.
Zomato’s B2B arm Hyperpure will also acquire BlinkIt’s B2B business Hands on Trade Private Limited (HOTPL) warehousing and ancillary services business for Rs 60.7 crore, according to the filings.
Apart from the equity financing, the firm also agreed to put in a $150 million loan to BlinkIt as part of its future investment in the quick commerce business in March this year.
Since its listing on stock exchanges in July last year, Zomato has backed half a dozen companies including logistics aggregator Shiprocket, offline discovery and reward platform Magicpin, fitness platform Curefit, digital advertising company Adonmo and food ordering system UrbanPiper.