Zomato, Blinkit reach merger agreement: Report

The food-delivery company in August acquired a more than 9% stake in SoftBank-backed Blinkit

Food-tech platform Zomato and cash-strapped online grocery firm Blinkit (formerly Grofers) have likely reached a merger deal that values the instant-delivery service between $700 million and $750 million, according to a report by the TechCrunch.

Zomato has also extended a loan of $150 million (Rs 1,145 crore) to Grofers India. In a BSE regulatory filing, Zomato stated that the company has extended a loan at an interest of 12 per cent per annum or higher with a tenor of not more than a year, and will be given in one or more tranches.

According to a report by the Business Standard, the two companies were discussing a share-swap deal in which Blinkit would be valued at around $750-800 million (up to Rs 6,100 crore). While the shareholders and investors of Blinkit would get around 10 per cent in Zomato, SoftBank, which has 40 per cent stake in Blinkit, would get around 4-4.5 per cent shares in the merged entity.

Formerly known as Grofers, Blinkit rebranded itself late last year as its CEO promised to speed up deliveries of everything from groceries to electronics in a burgeoning market dominated by Walmart's Flipkart and Amazon's local unit. The startup, which operates in more than 20 locations across India, offers the convenience of delivery in 10 minutes, far lower than the hours or days most competitors take.

The food-delivery company in August acquired a more than 9 per cent stake in SoftBank-backed Blinkit for Rs 518 crore ($67.77 million).

Zomato had said in its latest earnings report that it would spend as much as $400 million on potential investments in the quick commerce market over the next two years.

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