A note on the Zomato-Blinkit transaction

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Editor's note: The long speculated acquisition of Blinkit (previously Grofers) by Zomato has finally been announced. The latter’s board of directors approved the acquisition on Friday evening and it is now awaiting approval from the shareholders and stock exchanges. It’s an all-stock deal with the grocery delivery startup valued at Rs 4,447 crore, or about $570 million.  At the moment, Zomato already holds 9% and 8.4% in Blinkit’s B2C and B2B entities, respectively; it had invested $100 million, or about Rs 750 crore in Blinkit in August 2021. Earlier this year, Zomato had also extended a loan of up to $150 million, or around Rs 1,100 crore, to Blinkit. There are three points about the acquisition that stand out and make little sense in the larger scheme of things. Business In its blog, Zomato has published an overview of Blinkit’s numbers—number of orders, gross order value, revenue, average order value, user base and a few more. There isn’t much that can be said about the numbers specifically, given that there is very little to compare them to. Zomato compares Blinkit’s numbers to …