PC: The Financial Express
Food tech giant Zomato has poured investment of about ₹1,500 crore (approximately $178 million) into its quick commerce subsidiary Blinkit, it has announced. Zomato had just raised ₹500 crore in its previous round of funding in July, meaning the company is very aggressive in its Quick commerce voyage.
To undertake this capital raise, the company raised about ₹ 11.94 crore through an issuance of 7,612 equity shares by inking a special resolution with the board. Zomato is following its wider trend to improve its financial position and enable it to grow the business including the quick commerce segment, which is having increasing popularity now.
Financial Performance and Market Dynamics
This is the latest investment from Zomato which has had a strong financial performance in the third quarter of its fiscal year. Operating revenue of ₹5,405 crore for the company was a 64.4% increase over the previous year, which was ₹3,288 crore in the same period. Yet, while this is fabulous revenue growth for Zomato, the profit went down by 57.2 percent, to ₹59 crore.
On the other hand, Blinkit registered impressive growth, its revenue from operations multiplied over 117% in Q3 FY25, up to ₹1,399 crore from ₹644 crore. This substantial rise in delivery services, which indicate the increasing demand for quick delivery services in India, where consumers are now keener on convenience and speed.
Competitive Landscape
Investment by Zomato in Blinkit at a time when competition in quick commerce space is heating up. Earlier this week, Zomato’s major rival Swiggy added ₹1,000 crore ($117 million) into its supply chain unit Scootsy Logistics to fuel its quick commerce arm Instamart. A report by Citi states that Zomato owned Blinkit has a 41 percent share in the fast delivery market whereas Swiggy owned Instamart is rated at around 23 percent.
The presence of such a highly competitive milieu serves as the strong push that Zomato and the other companies will need to endeavor to foster a unique service offering to lay down the foothold and grow customer base. The fact that Zomato has invested strategically in Blinkit is among the cleanest ways of indicating that the company is here to rule the Indian quick commerce market.
Zomato with the latest funding round intends to bolster Blinkit’s capabilities even further and then take its influence in the quick commerce sphere. With changing consumer’s preference for faster delivery options, this investment marks Zomato as ideally poised to capture the growing demand for fast delivery services. With growth potential of the quick commerce space in front of it, Zomato is taking the helm role in that game and could be quite aggressive in that market. In both the two companies Zomato and Blinkit have grown, the emphasis will be on using technology and logistics to meet the changing consumer convenience.
