Acquisition of instant commerce company Blinkit For Rs 4The company’s cofounder and CEO Deepinder Goyal wrote that the all-stock deal worth Rs 447 crore on Friday will add a significant addressable market for the firm. In a letter to its shareholders.
The acquisition took place at a time when
Vikas is striving to enter the commercial sector quickly while achieving profitability. blinkit Product categories have visibility into inventory owned by third-party distributors and retailers, in
A network of warehouses and distributed dark stores,
“The next big category (accelerated commerce) is timely as our existing food business continues to grow towards profitability. Zomato has grown at a CAGR of 86% in the last 4 years to adjusted revenue of $710 million (Rs 5,554 crore), while the adjusted EBITDA margin increased from 153% in FY19 (153%) to FY22 (18%) Has gone,” Goyal said in the letter.
Zomato defines Adjusted Ebitda as the share-based payment expense minus Ebitda.
According to the letter, Blinkit’s business was slated for 100% accelerated commerce in January 2022 after the SoftBank-backed firm — formerly known as Grofers — spun off.
Rebranded itself at the end of last year,
In May this year, Blinkit’s Gross Order Value (GOV) reached Rs 402.8 crore – almost one-fifth of Zomato’s monthly average food delivery government in the last quarter of FY 2022. Additionally, Blinkit had a monthly order frequency of 3.5x. May 2022 and even more than Zomato.
Find stories that interest you
The CEO also said that Blinkit’s GOV was catching up with Zomato’s GOV in some key markets. “This indicates that Accelerated Commerce will add a significant new addressable market to our business in the long term. In a sample market like Gurugram, Blinkit.gov already owns about 63% of Zomato’s food delivery govt.
According to the shareholder letter, Blinkit had received revenue of Rs 22.1 crore in January. This has increased to Rs 58 crore by May.
Blinkit’s revenue includes its marketplace commission income, customer delivery fees, advertising revenue, warehousing and ancillary services income.
CEO Deepinder Goyal The customer spends on the Zomato platform will increase the wallet share and also drive higher frequency and engagement with customers with instant commerce, it added.
Zomato’s Chief Financial Officer (CFO) Akshat Goyal said in the note that by tapping into instant commerce through Blinkit, Zomato will grow the addressable market.
“This (Blinkit deal) will increase the potential profit pool and make the business more defensive. Peak demand times for food delivery are complemented by accelerated commerce demand peaks in non-meal times. This will help increase the utilization of our hyperlocal delivery fleet and reduce the cost of delivery,” said the CFO.
According to him, a primary reason for Zomato to acquire Blinkit and not enter the instant commerce space directly was Blinkit’s proprietary technology platform, business scale, relationships with third-party brands and vendors, and warehouse and dark store networks.
“Blinkit’s proprietary technology is the key to optimizing delivery networks and operations,” the CFO said.
According to RedSeer, the total commerce market in India is $1.3 trillion, and Zomato considers accelerated commerce to be an important channel of customer demand.