Zomato’s acquisition of Blinkit

Zomato’s acquisition of Blinkit for Rs.4,447 crore in an all-stock deal marked its entry into the emerging sector of “quick-commerce”. This deal shall provide cross-selling opportunities to Blinkit by gaining access to the 15mn active monthly users of Zomato and vice-versa. Further, the merger might yield synergies in terms of better utilisation of Zomato’s hyperlocal delivery fleet and consequently reducing their cost of delivery. However this high cash burning sector houses fierce competition from the likes of Zepto, Dunzo, Swiggy Instamart BigBasket, etc and it will be interesting to see how this expensive investment by zomato pans out in the future. Moreover, whether Ola’s decision to exit food delivery space to focus on its core streams of strength amidst the current market conditions should have been a learning lesson for zomato too, is a question which might be answered in the near future.