: Did Zomato buy Blinkit to offset its losses from online food delivery? #IndiaNEWS #Business By Nishant AroraNew Delhi, June 25 | Online food delivery platform Zomato, which saw its stock tumbling

Did Zomato buy Blinkit to offset its losses from online food delivery? #IndiaNEWS #Business
By Nishant AroraNew Delhi, June 25 | Online food delivery platform Zomato, which saw its stock tumbling below its IPO price as India reopened and retail food industry came back on track, had acquired quick-commerce grocery delivery platform Blinkit for a whopping Rs 4,447 crore (about 8 million). Will this acquisition change its future prospects?
Zomato already owned more than 9 per cent stake in Blinkit (earlier Grofers). While the earlier Blinkit deal was valued around 0 million, the drop in Zomatos share price reduced it to 8 million.
Zomatos stock is hovering around Rs 70, after sliding to nearly Rs 50 (it opened at Rs 76 during its mega IPO last year).
According to market experts, Zomato is facing severe cash flow problems as its operational cost is running quite high.
Zomato Founder and CEO Deepinder Goyal said on Friday that he is not getting into the quick commerce market because growth in food delivery is now saturating.
Food delivery has a long runway ahead. In FY22, our Adjusted Revenue grew by 109 per cent over FY21 and we expect healthy growth to continue going forward, he noted.
According to him, quick commerce is a natural extension of Zomatos food delivery business.
How is it a natural extension? Because it is also a hyperlocal business, just like food delivery. And, because it also caters to a need for quick delivery of products for our customers. Quick commerce will help us increase the customer wallet share spent on our platform and also drive higher frequency and engagement from our customers, he said in a company statement.
Zomato has grown at a CAGR of 86 per cent in the last four years to an adjusted revenue of 0 million while the adjusted EBITDA margin has improved from (153 per cent) in FY19 to (18 per cent) in FY22.
The acquisition came as the quick commerce (10-minute delivery) segment is brewing with new hope as people prefer groceries and other home essentials at their doorsteps within no time after making an online order.
Startups like Swiggy Instamart, Zepto and Reliance-backed Dunzo, among others, are trying to defy the current slowdown, as they add more goods and daily essentials to their kitty and deliver them to their customers.
In December 2021, Swiggy announced to pour 0 million into Instamart.
Last month, 10-minute delivery platform Zepto raised 0 million, taking its valuation to around 0 million.
Indias quick commerce market is all set to witness 15 times growth by 2025, reaching a market size of nearly . 5 billion, according to Bengaluru-based market research firm RedSeer.
The total addressable market for quick commerce in India stands at billion, and urban areas are driving this market on the back of mid-high-income households.