Zomato will invest 500 million dollars into Blinkit, the quick commerce company that was once Grofers, according to November 2021 reports. However, the markets turned volatile, which adversely affected Zomato’s share price. Blinkit has now raised $100 million from Zomato through convertible notes, while that round of funding is set to be renegotiated.
Albinder Dhindsa, Blinkit’s co-founder and CEO, announced on Thursday that the company has closed an additional 100 million dollar deal as part of its ongoing fundraising.
According to people familiar with the fundraise, the funds are being raised through convertible notes from Zomato, which will be converted into stock later.
Blinkit is looking to raise $400 million in funding from Zomato and other investors, which is expected to close in the next couple of quarters, according to a person with inside knowledge.
Additionally, Zomato invested $100 million in the company and its wholesale entity Hands on Trades last year, taking the quick commerce startup’s valuation to $1 billion. This investment was approved by the Competition Commission of India (CCI) in August last year.
Zomato, while announcing its December quarter results said that the company would continue to be bullish on quick commerce and would go onto invest an additional 400million$ over the period of next two years.
Delayed Fundraise Due to Market Volatility
The volatility in the public markets and its impact on Zomato’s share price has delayed the closing of the round, which was expected to close this month.
A source said that “The market conditions have affected Zomato, and thus Blinkit’s planned fundraising. The funding is expected to be negotiated again, with fresh terms. To go ahead with its plans, Blinkit, for now, has raised the first tranche of $100 million from Zomato”.
In order to push its quick commerce ambitions, it was reported that in November Zomato would invest 500million$ in Blinkit. This would then potentially bring the valuation of the company at $1.5 billion. In the last month, company said that the company has also raised the upper limit of its potential investments in the quick commerce segment.
Previously owing to a sell-off in tech stocks, and now the increased volatility due to Russia’s invasion of Ukraine, the stocks of Zomato have shed over 41% in the past three months.
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