Zomato to acquire Blinkit for $569Mn

Online food aggregator and delivery platform Zomato’s board has agreed to acquire quick commerce startup Blinkit for Rs 4,447 crore in an all-stock deal. Zomato is also acquiring Blinkit's warehousing and ancillary services business Hands on Trade Private Limited for $8 million.

Zomato will issue up to 62.9 crore shares to Blinkit investors, amounting to equity dilution of 6.88% stake, on a fully diluted basis at the prescribed preferential allotment price of Rs 70.76 per share.

Grofers International Pte, the promoter entity of Grofers founders, will get 759 million shares or over 0.8% stake in Zomato. Last year, Blinkit (then Grofers) had raised $100 million from Zomato in a round which gave the company a unicorn status. Blinkit was among the more than 40 unicorns created in India last year.

Blinkit’s largest shareholder SoftBank will receive 28.71 crore shares of Zomato, Tiger Global will take 12.34 crore shares, BCCL will get 1.5 crore shares and South Korean investor DAOL will get 3.66 crore shares of the food delivery major.

Zomato CEO Deepinder Goyal said, “We have seen this industry grow rapidly both in India and globally, as customers have found great value in quick delivery of groceries and other essentials. This business is also synergistic with our core food business, giving Zomato the right to win in the long-term. This foray into the next big category is timely as our existing food business is steadily growing towards profitability.”

The new shares to be issued by Zomato are subject to lock-ins. While the statutory lock-in requirement is six months, we have negotiated for a 12-month lock-in for selling shareholders of Blinkit. Half of the shares attributable to Albinder Dhindsa, the founder of Blinkit, will be locked in for two years and the remainder will be locked in for a year. The shares attributable to the exercised/vested employee stock options of Blinkit will be locked in for the mandatory six-month period.