Zomato Board Likely To Sign Blinkit Acquisition Deal on June 17 Under the acquisition proposal, Blinkit's shareholders expected to get a little less than 10 per cent stake in Zomato
By Teena Jose
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Food delivery company, Zomato's board is likely to meet on June 17, for the acquisition of Blinkit, a quick-commerce company. Last year, Zomato invested $100 million in Blinkit and had plans to invest a total of $400 million. As per reports, the acquisition deal is supposed to be at $700 million based on Zomato's market capitalization at that time. That was lower than Blinkit's last valuation of a little over $1 billion.
Under the acquisition proposal, Blinkit's shareholders expected to get a little less than 10 per cent stake in Zomato. Blinkit's existing investor, SoftBank Vision Fund, will get an almost 4 per cent stake in the food tech company, as per reports.
Earlier this year, Zomato extended a loan up to $150 million to Blinkit. Last month, during its first investor call, Zomato founder Deepinder Goyal said in a news statement that only a part of this money had been given out to Blinkit and that releasing the remaining amount would depend on whether it is required or not.
"We are very conscious that we do not have to overpay for any merger and acquisition and we have strong governance processes. We will follow the process and not make any mistake on that front," Goyal added in the statement while commenting on the valuation of Blinkit.
"We continue to remain bullish on quick-commerce, especially given how synergistic it is to our core food delivery business, and we are excited with the progress that Blinkit has made in this space. While there is a lot to do as the business is at its early stages, there is still a lot of low hanging fruit to drive growth and efficiency," he further added.
As per market reports, Zomato, in last month reported that its consolidated net loss increased to INR 360 crore in the quarter ending March, 2022 as its expenses nearly doubled. Based on Zomato's closing stock price of INR 69.85 on the BSE Monday, a 10 per cent stock is worth about $708 million. Zomato already holds 10 per cent stake on Blinkit.
Founded in 2008 by Deepinder Goyal and Pankaj Chaddah, Zomato is an Indian multinational restaurant aggregator and food delivery company that provides information, menus and user reviews of restaurants as well as food delivery options from partner restaurants in selected cities.
Blinkit, formerly known as Grofers, is a Gurgaon-based Indian instant delivery service. The platform secures the items from their warehouse and deliver the items to the consumers within 10 minutes. Blinkit currently operates in more than 30 cities in India. As per reports, it has raised about $630 million from investors including SoftBank, Tiger Global and Sequoia Capital.
