Foodtech giant Zomato is set to significantly boost its quick commerce and entertainment sectors with a substantial investment of Rs 400 crore. The company will allocate Rs 300 crore ($36 million) to Blinkit, its quick commerce arm, and Rs 100 crore ($12 million) to Zomato Entertainment, its subsidiary managing live events and ticketing.
Strategic Investments in Blinkit and Zomato Entertainment
The recent resolution by Zomato’s board, as indicated in regulatory filings, confirms the infusion of Rs 300 crore into Blinkit Commerce and Rs 100 crore into Zomato Entertainment. This strategic move is part of Zomato’s broader plan to enhance its market position amidst growing competition.
With this latest funding round, Zomato’s total investment in Blinkit has reached Rs 2,300 crore ($277 million) since its acquisition in August 2022. Blinkit, formerly known as Grofers, was acquired by Zomato in an all-stock deal valued at Rs 4,477 crore ($568 million). The fresh capital comes on the heels of Blinkit achieving EBITDA profitability and a 19.4% revenue growth to Rs 769 crore in Q4 FY24. Zomato itself posted a profit of Rs 175 crore in the same period.
The Quick Commerce Landscape
The quick commerce sector has seen intense competition over the past few years. Swiggy, a major competitor, announced a $700 million investment in its quick commerce business, Instamart, in late 2021. Zepto, another key player, has raised approximately $430 million across multiple funding rounds and is planning additional fundraising. E-commerce leader Flipkart, owned by Walmart, is also entering the quick commerce arena, having recently secured $350 million from Google.
Blinkit’s Growing Value
Analysts at Goldman Sachs recently highlighted Blinkit’s increasing value, suggesting it may surpass that of Zomato itself. This investment by Zomato underscores its commitment to capitalizing on Blinkit’s potential and expanding its footprint in the quick commerce sector.
Future Outlook
Zomato’s dual investments in Blinkit and Zomato Entertainment reflect a strategic approach to diversify and strengthen its business model. By bolstering its quick commerce capabilities and enhancing its entertainment offerings, Zomato aims to stay ahead in the competitive landscape and deliver enhanced value to its customers and stakeholders.
With these investments, Zomato is poised to further solidify its market presence and drive sustained growth in both the quick commerce and entertainment sectors.
