Zomato to acquire Blinkit for ₹4,447 cr in all-stock deal
BENGALURU: Food delivery platform Zomato Ltd has agreed to acquire instant grocery startup Blinkit for ₹4,447 crore ($569 million) in an all-stock deal, as it seeks to exploit a fast-growing market for quick grocery delivery.
As part of the deal, Zomato will issue up to 629 million shares, amounting to an equity stake of 6.88% on a fully-diluted basis, at an allotment price of ₹70.76 per share, Zomato said in a regulatory filing. Shares of Zomato closed at ₹70.35 on BSE on Friday, up 1.15%, before the acquisition was announced.
Zomato also acquired Blinkit’s warehousing and ancillary services business HOTPL for $8 million. It would, however, not acquire the B2B trading business as that no longer fits strategically into its plans, it said.
Japan’s Softbank, the biggest shareholder in Blinkit with a 46% stake, will get around 3.2% stake in Zomato as part of the transaction, as per Vccircle estimates. Tiger Global Management will get around 1.3% stake and Sequoia Capital, already an investor in Zomato, will get an additional 0.5%.
Other investors in Blinkit (previously Grofers) who stand to get new shares in Zomato include Korea’s KTB Ventures, Yuri Milner’s Apollete Asia and Bennet Coleman and Co. Ltd.
Grofers International Pte, the promoter entity of Grofers founders, will get 759 million shares or over 0.8% stake in Zomato. The Blinkit deal underscores the hyper-competitive and cash-guzzling nature of the quick commerce business. Blinkit was among the more than 40 unicorns created in India last year.
The new shares to be issued by Zomato are subject to lockins. “While the statutory lock-in requirement is six months, we have negotiated for a 12-month lock-in for selling shareholders of Blinkit,” Zomato added.
In addition, half of the shares attributable to Albinder Dhindsa, 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.