According to sources, Zomato will invest $500 million in Blinkit, the rapid commerce business that was originally Grofers, in November 2021. The markets, on the other hand, became very volatile, causing Zomato’s stock price to plummet. For the time being, Blinkit has raised $100 million through convertible notes from Zomato while that deal is being renegotiated.
Blinkist’s founders and CEO, Albinder Dhindsa, announced to staff on Thursday that the company had finalized a 100 million dollar deal as part of its continuing fundraise. According to people familiar with the fundraising, the money is being raised using Zomato convertible notes, which will be converted into equity later.
According to a source familiar with the situation, this is part of a bigger $400 million fundraising round that Blinkit is seeking from Zomato and other investors and is scheduled to conclude in the next two quarters.
It comes on top of Zomato’s $100 million investment in the firm and its wholesale subsidiary Hands-on Trades last year, which helped the rapid commerce startup reach a $1 billion value. The transaction was authorized by the Competition Commission of India (CCI) in August of last year.
Delayed Fundraise Due to Market Volatility
The round, which was supposed to finish this month, has been postponed due to market volatility and its impact on Zomato’s share price.
“Market circumstances have hampered Zomato, and hence Blinkit’s anticipated funding,” a source said. The money will most likely be renegotiated with new stipulations. For the time being, Blinkit has raised the first tranche of $100 million from Zomato in order to move through with its plans.”
In November, it was rumored that Zomato will spend $500 million in Blinkit in order to further its fast commerce goals. This might possibly raise the company’s worth to $1.5 billion. The corporation recently announced that it has increased the top limit of its prospective investments in the rapid commerce area.
Zomato’s stock has dropped almost 41% in the last three months, owing to a sell-off in IT companies and now greater volatility due to Russia’s invasion of Ukraine.