Food tech giant Zomato has made another major move in the quick commerce industry by investing Rs 1,500 crore (approximately $178 million) in its subsidiary Blinkit. This investment follows a Rs 500 crore funding round completed just a month earlier, further solidifying Zomato’s commitment to expanding its presence in the rapid delivery market.
According to regulatory filings with the Registrar of Companies (RoC), Blinkit’s board has approved a special resolution to issue 7,612 equity shares at an issue price of Rs 19,70,181 each. This highlights the company’s aggressive plans to scale up operations and enhance its market reach.
Strengthening Financial Position
The fresh capital infusion follows Zomato’s massive Rs 8,500 crore fundraising through a Qualified Institutions Placement (QIP). The funds aim to bolster the company’s financial stability while accelerating strategic initiatives in the fast-growing commerce sector.
Zomato has witnessed a remarkable 64.4% year-on-year growth in operating revenue during Q3 FY24, reaching Rs 5,405 crore. However, its net profit saw a 57.2% decline to Rs 59 crore. Meanwhile, Blinkit has been showing impressive growth, with its revenue from operations jumping over 117% in Q3 FY25—from Rs 644 crore to Rs 1,399 crore. This growth signifies the company’s strong momentum as it scales its delivery capabilities and expands its market footprint.
Increasing Competition in Quick Commerce
With this investment, Zomato is intensifying its competition with Swiggy, which recently injected Rs 1,000 crore (approximately $117 million) into its supply chain unit, Scootsy Logistics. This move aims to strengthen Swiggy’s quick commerce business, Instamart.
A recent Citi report shows that Zomato-backed Blinkit is leading the quick commerce market in India with a 41% share, ahead of competitors like Zepto and Swiggy Instamart, which holds a 23% market share.
Expansion Plans and New Offerings
Blinkit is aggressively expanding its operations, focusing on increasing the number of dark stores—a crucial element in ensuring rapid deliveries. The company plans to establish 2,000 dark stores by the end of 2026, a strategy that will require substantial capital investment. Additionally, Blinkit has broadened its product offerings to include high-value items like televisions, laptops, and printers, aiming to boost its average order value.
Since acquiring Blinkit in August 2022, Zomato has invested a total of Rs 4,300 crore into the platform. The latest infusion is expected to support Blinkit’s rapid expansion amid rising competition from Zepto and Swiggy Instamart.
Challenges and Profitability Goals
Despite its rapid expansion, Blinkit faced operational losses of Rs 103 crore in Q3 FY25, up from near break-even levels in Q2 FY25. This was primarily due to the aggressive opening of new dark stores. The company has stated that it will continue expanding rapidly until it reaches the 2,000-store milestone, which will necessitate further financial backing.
Competitors are also investing significant capital to gain market share. Zepto, for instance, is reportedly spending Rs 350-400 crore per month, while Swiggy Instamart is focusing on launching larger stores called megapods to accommodate a wider range of products. Swiggy has also announced plans to invest Rs 1,000 crore in its supply chain subsidiary, Scootsy, which operates dark stores for Instamart.
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Market Impact
The aggressive expansion of quick commerce platforms is reshaping India’s online delivery landscape. Investors and industry analysts are keenly watching how these firms balance growth with profitability. On the stock market, Zomato’s shares closed 3.32% lower at Rs 222.60 following the announcement, reflecting investor concerns over continued high spending.
As Blinkit continues to scale up and its competitors ramp up investments, the quick commerce sector in India is poised for intense competition. The coming months will be crucial in determining which platform secures long-term dominance in this rapidly evolving market.
