Restaurant listings and food delivery service Zomato has agreed to acquire one of its portfolio companies, India-based rapid delivery service Blinkit, in an all-stock deal valued between $700m and $750m, TechCrunch reported yesterday.
Founded in 2013 as Grofers, Blinkit operates an online platform where shoppers have access to a range of food, household and personal care products available for delivery in under 15 minutes.
Amid intensifying competition with rival food delivery services such as Swiggy, which itself raised $700m in a January 2022 series K round backed by internet groups Prosus and Smile Group, Blinkit has scaled back its activity in some Indian cities to ensure a greater proportion of 10-minute delivery markets.
The deal is set to give Blinkit greater financial firepower to grow and compete against rivals, while giving Zomato a foothold in the instant grocery delivery market.
Rumours concerning the deal have been around since early 2020, when it was reported the parties were in talks for a $750m all-share acquisition, with internet and telecommunications group SoftBank’s Vision Fund, an existing backer, reportedly set to invest $100m to $200m in the merged business.
The news comes on the heels of Blinkit reportedly raising $100m from investors including Zomato earlier this month as part of a round expected to reach $400m. It had received $16.7m in series G funding from venture capital firm KTB Ventures in October 2021.
Zomato had previously taken part in a $120m round for the company six months earlier at a $1bn valuation alongside Tiger Global Management, increasing its overall funding to $640m.
Media group Bennett Coleman & Co had contributed to a $20m round for Blinkit in November 2019, following a $210m series F round featuring SoftBank Vision Fund, Abu Dhabi Capital Group, KBT, Tiger Global and Sequoia Capital that closed in May the same year.
The series F round valued the company at nearly $1bn, more than triple the $300m valuation at which it had raised $61.4m in a 2018 series D led by Vision Fund that included Tiger Global and Yuri Milner.
Blinkit had previously received $120m in a series C round led by SoftBank and backed by Apoletto Managers and existing investors Sequoia and Tiger Global.
