About $75-100 million debt may be extended by Zomato in order to rescue Blinkit
- ByStartupStory | March 10, 2022
Zomato, the Food delivery platform, may extend about $75-$100 million loan in order to rescue Blinkit, a cash-strapped quick commerce startup. When the startup has laid off employees, shuttered dark stores, and delayed some vendor payments, amid intense competition in the quick commerce space, at that time the lifeline came in.
About $100 million has been invested by Zomato in Blinkit (previously Grofers) in July last year for a 10 percent stake at a valuation of a billion dollars just before its initial public offering. A further $500 million was supposed to be raised by Blinkit from Zomato, due to current market conditions this hasn’t been materialised, where in new-age tech stocks have been hammered. Sources said thet the $100 million debt will help Blinkit tide over liquidity issues, paving the way for an eventual acquisition by Zomato.
In order to raise money Blinkit has also been in talks with a bunch of venture debt firms and has recently signed a term sheet worth $10 million with Innoven Capital for debt. With the company receiving a few crores last month, the money is expected to come from Innoven in three tranches.
In cities like Mumbai, Hyderabad and Kolkata across segments such as riders, pickers and store managers most of the layoffs have happened by Blinkit. The company on its payroll currently has over 2,000 people and 30,000 ground staff. This layoff is likely to impact around 5 percent of the overall strength.
Between November and February, Blinkit spent Rs 600 crore in order to expand the business and acquire customers in the cash-guzzling and deep-discounted grocery delivery space. But currently it has been looking to reduce its cash burn and to cut costs. After shutting down approximately 40 of them in the last couple of months, the company currently has close to 445 dark stores.
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