Blinkit Bags $100 Million Funds From Zomato, Talking For Another Raise Of $300 million

Blinkit makes headlines on Thursday after they bagged a $100 million dollar deal with Zomato. The company received funds worth $100 million from one of the biggest food express Zomato and is in the process of raising another $300 million. The co-founder and chief executive Albinder Dhindsa confirmed the news and he also informed all the employees regarding the same. 

He gave this big news to the employees through the company’s Slack channel. It has also been said that the funds will be later converted into equity as they are being raised through Zomato’s convertible bonds.

The deal is said to be closed in the next two quarters and the fundraising amount will reach up to $400 million said one of the sources present in the discussion. Although, along with this, Zomato also invested in the company with its wholesale Hands-on Trades in 2021, which brought the valuation of the commerce start-up to $1 billion, hence being approved by the Competition Commission of India (CCI). The investment was first reported by ET and they said that it was to be around $500 million in order to boost the company’s fast-delivering experience.

But, due to the volatility in Zomato’s share prices because of the up and down in the share market, this investment got delayed around. In one of the statements, it was said by a source that, 

“Market conditions have impacted Zomato, and therefore Blinkit’s planned fundraising. The financing is expected to be renegotiated, with new conditions. To push through with its plans, Blinkit has tentatively raised the first tranche of $100 million from Zomato.”

Dhindsa also confirmed in a note that whether the funding has been delayed but the company will keep on working and focus on growing their business by improving execution speed and lowering the burn rate. In the note, he also added, 

“We’ve closed our next fundraiser ($100 million) and money will be in the bank over the next week. We’ve come a long way in the past eight months transitioning the business into the largest instant commerce player in the industry space.” He also added, “Our next chapter should give Amazon a run for its money.”

Initially Grofers, Blinkit changed the platform and announced its move towards 10 minutes grocery delivery space in August 2021 and started its services in the top 12 cities of India. With their super fast service, the app gained a lot of popularity among people. Started on a very low scale now the company has around 30,000 employees on the ground and they have also invested in the 450 warehouses along with dark stores for scaling up their rapid trips.

The company also focused upon the operations and their collaboration with Zomato added potential to their plan. While talking about this decision and future plans, Zomato added,

“We are becoming increasingly confident in our decision to invest behind market leadership here with healthy unit economics. As a result, we are updating the upper bound of our potential investments in this category to $400m cash over the next two years.”