Zomato Invests INR 1,500 Crore in Blinkit Amid Intensifying Quick Commerce Competition

Nitin Konde, Varun Bhardwaj

25 Feb 2025 — 3 min read

Zomato Invests INR 1,500 Crore into Blinkit to Boost Quick Commerce

Zomato has invested INR 4,300 crore into Blinkit since acquiring the online grocery delivery service, formerly known as Grofers, in an all-stock deal for INR 4,477 crore in August 2022. Zomato has been investing more in Blinkit, mostly to finance its rapid growth and offset operating losses in the fiercely competitive quick commerce market, according to reports published by various media houses. A media article indicates that Blinkit's revenues sufficiently cover its operational needs; yet, the burn rate remains elevated due to aggressive expansion and rising marketing expenditures.

This necessitates more capital infusions to stimulate expansion. In a recent interview, Blinkit CEO Albinder Dhindsa expressed a similar perspective, stating that the majority of the company's expenses arise from expansion efforts. Dhindsa stated that the expenses associated with expansion are inescapable, whether incurred through marketing or idle costs. Based on Blinkit's growth trends, the company may have managed to offset its expansion expenses, but heightened marketing expenditures have impeded progress.

Funds Pouring in Amid Severe Competition

Blinkit's primary competitors, Swiggy Instamart and Zepto, have been actively securing funding to broaden their operations. Swiggy secured INR 4,500 crore with its IPO in November 2024, while Zepto has accumulated almost $1.3 billion throughout many investment rounds in the past year. On February 21, Swiggy's board approved an INR 1,000 crore investment in its supply chain division, Scootsy Logistics, which operates dark stores for Instamart.

Swiggy's IPO prospectus revealed plans to invest an additional INR 1,300 crore in Scootsy to further expand its dark shop network. To strengthen its market position, Blinkit is adopting an aggressive growth strategy centred on its dark store architecture. As of December 2024, the corporation operated 1,007 dark stores, surpassing its growth target of 1,000 three months in advance. Blinkit has revised their expansion aim to achieve 2,000 dark stores by December 2025 instead of December 2026. Furthermore, Blinkit has broadened its product range to encompass high-value SKUs, such as televisions, laptops, and printers, to enhance the average order value.

Rapid Commerce Conflict

The rapid commerce industry has evolved into a high-cash-burn sector, with companies allocating billions towards expansion and client acquisition. Industry estimates indicate that the aggregate monthly cash burn of rapid commerce entities, including new entrants, ranges between INR 1,300 and 1,500 crore—more than double in recent months.

Despite nearing operational breakeven in Q2 FY25, Blinkit’s losses escalated in Q3 FY25, with operating losses rising to INR 103 crore from INR 8 crore in the preceding quarter. Swiggy reported a net loss of INR 799 crore, while Instamart had an adjusted EBITDA loss of INR 578 crore in Q3, compared to INR 358 crore in Q2. Zomato's ability to continue investing in Blinkit stems from its financial stability. In November 2024, Zomato secured INR 8,500 crore in a qualified institutional placement (QIP) to enhance its balance sheet and finance its rapid commerce operations. As of December 31, 2024, Zomato possessed cash reserves amounting to INR 19,235 crore, providing adequate liquidity to support Blinkit's expansion.