Indian delivery startups Blinkit and Zomato agree to a merger deal

blinkit and zomato agree to a merger deal

Instant delivery service Blinkit and food delivery firm Zomato have agreed to a merger agreement. The all-stock merger agreement values Blinkit between $700 million-$750 million.

The merger, or more technically an acquisition, comes when Blinkit has been struggling to raise funds from either most of its existing investors or new investors for several quarters. The SoftBank-backed startup, formerly known as Grofers, pivoted to instant grocery delivery last year.

In August 2021, Indian food delivery giant, Zomato, acquired over 9% stake in SoftBank-backed Blinkit for Rs 518 crore ($67.77 million).

Earlier this year, Blinkit shut many of its dark stores, scaled down the business in many cities, and pledged to focus more aggressively on 10-minute grocery deliveries. The firm said if its order can’t be delivered in 10 minutes to customers, it will cease to serve in those cities.

The Gurgaon-based startup, which has raised $700 million to date and was last valued at $1 billion, struggled to compete with YC Continuity-backed Zepto and SoftBank- backed Swiggy.

The merger deal is subject to approval from the Indian antitrust watchdog, the Competition Commission of India.

Through the merger with Blinkit, Zomato will acquire a partner that can finally allow it to operate in the instant grocery delivery space and grocery altogether, two sectors Zomato has previously attempted to sink its teeth in but failed each time.