Business Standard

Why the mega acquisition of Blinkit may give Zomato digestion problems

Market sentiment, inadequate data and unsustainable unit economics are stacked against the acquisition plan and 10-minute food delivery.

Delivery
Premium

In e-commerce, contribution margin is calculated as revenue from fulfilling an order minus the variable costs attached with it

Deepsekhar Choudhury Bengaluru
“The acquisition plan was always hidden in plain sight”.

“It’s just about feeding public market investors something fresh.” “It’s a long-term bet on the hyperlocal economy.”

“A Hail Mary for survival.” 

Last week, refrains like these could be heard from venture capital investors, analysts and hyperlocal experts as they waxed eloquent about Zomato’s plan to swallow up quick commerce player Blinkit in a heady $750-800 million deal. 

Although the food delivery major is yet to publicly state its intention to acquire the erstwhile Grofers, company insiders said that a term sheet has been finalised. “Some of Blinkit’s employees have already

What you get on BS Premium?

  • Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
  • Pick your 5 favourite companies, get a daily email with all news updates on them.
  • Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
  • Preferential invites to Business Standard events.
  • Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in