Zomato doubles down on investment in Blinkit with a Rs 1,500 Cr bet
Like Zomato, Swiggy is also set to invest Rs 1,000 crore for quick commerce expansion on top of an earlier investment of Rs 1,600 crore.
Foodtech giant Zomato has invested Rs 1,500 crore in its quick commerce arm Blinkit amid fierce competition and rapid expansion.
Zomato acquired 7,612 shares at the issue price of 19,70,171 per share to invest Rs 1,500 crore, as per Registrar of Companies (RoC).
Last week, foodtech rival Swiggy said it will invest up to Rs 1,000 crore in its unit, Scootsy Logistics to meet the working capital and expansion requirements of its quick commerce business. In an exchange filing, it said it acquired shares in the unit at Rs 7,640 apiece and expects to close the deal across one or multiple tranches. In December, Swiggy announced an investment of Rs 1,600 crore in Scootsy by way of a subscription rights issue.
In November, Deepinder Goyal-led Zomato raised $1 billion through qualified institutional placement from domestic mutual funds. This marked the company's first major fundraise since its IPO in 2021.
Both Swiggy and Zomato stocks have taken a beating to cumulatively wipe out more than $11 billion since the companies unveiled their third-quarter earnings. The stock, which has since recovered, is currently trading 1.49% higher at Rs 226 for Zomato and 2.1% lower at Rs 369 for Swiggy on NSE.
Such heavy investments in quick commerce come as market leader Blinkit and first mover Swiggy double down on store penetration and expansion with growing competition.
Earlier this month, ecommerce giant Amazon initiated pilots for its quick commerce service Amazon Now in Bengaluru. Amazon's entry comes on the heels of rapid expansion by Flipkart Minutes. Recently, quick commerce unicorn Zepto shifted its corporate base from India as it reportedly gears for a $1 billion IPO.
Edited by Affirunisa Kankudti