Zomato has reportedly reached an all-stock merger with Blinkit that values the instant-delivery service between $700 million and $750 million. Zomato acquired a more than 9 percent stake in SoftBank-backed Blinkit for 518 crore last year.
Formerly known as Grofers, Blinkit rebranded itself late last year as it promised to speed up deliveries of everything, from groceries to electronics in a rapidly growing market. In a regulatory filing to the Bombay Stock Exchange, Zomato said that it had approved a loan of up to $150 million with 12 percent p.a. or higher interest rate to Blinkit in one or more tranches.
Zomato said, “This loan will support the capital requirements of GIPL in the near term and is in line with our stated intent of investing up to $400 million (roughly Rs. 3,057 crore) cash in quick commerce in India over the next 2 years.”
Earlier this year, Blinkit shut many of its dark stores and scaled down the business in many cities as it pledged to focus more aggressively on 10-minute grocery deliveries and said if its orders can’t reach the customers in 10 minutes, it will not serve in those cities. The startup, which operates in more than 20 locations across India, offers the convenience of delivery in 10 minutes, far lower than the hours or days most competitors take.
The two firms will need to get the approval from the Indian antitrust watchdog Competition Commission of India for the deal. In Blinkit, Zomato will find a partner that can finally give it a play in the instant grocery delivery space — or grocery altogether.
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