Quick-commerce platform Blinkit will become larger than its parent Zomato’s food-delivery business in a year, Deepinder Goyal, chief executive of both the companies, said at the three-day Startup Mahakumbh event here on Monday.
“For us, it’s all about how we disrupt our own businesses,” Goyal said in conversation with Info Edge India cofounder and vice-chairman Sanjeev Bikhchandani, who also sits on Zomato’s board of directors. “For example, right now, we have a business plan competition going on inside the company, which will offer funds to a small team, which will disrupt the businesses that we’re in,” he said.
“This will lead to Zomato version 5 or Blinkit version 2. Blinkit is a part of Zomato version 4, and in one year’s time, Blinkit would be bigger than Zomato. So, I don’t know for how long Zomato will have its relevance,” Goyal added.
To this, Bikhchandani quipped that Zomato is likely to stay relevant moving forward considering there will always be a market for food delivery.
“But maybe somebody else will disrupt the way food is being delivered to customers,” Goyal said in response.
Info Edge India was among the earliest investors in Zomato.
Zomato acquired Blinkit for $570 million in an all-stock deal in 2022. The quick-commerce firm was founder by Albinder Dhindsa as Grofers, an online grocery delivery startup, which was backed by Tiger Global, SoftBank and Sequoia Capital India (now Peak XV Partners).
What’s next for Blinkit?
Currently, food delivery is Zomato’s mainstay business, accounting for around 56% of its consolidated revenues.
Analysts and stock brokerages have reset their view on Zomato, expecting Blinkit to drive the next phase of growth for the company.
The food-delivery major has big plans to take Blinkit beyond grocery delivery into ecommerce territory. ET had reported on March 4 that Blinkit and Mumbai-based Zepto are adding categories such as electronics, fashion, and home appliances as they start looking like mainstream ecommerce sites.
Highlighting the fast-changing technological landscape, Goyal said none of the business models created today will last beyond a decade.
“None of the business models being created right now will last beyond a decade because all the tech and distribution systems are changing,” he said. “You have to innovate and create new businesses from the outcomes you’ve created so far to last long. Zomato is already in its fourth version in its 16-year journey.”
Profitability push
Zomato posted its first quarterly profit in April-June FY24, but Goyal said the company was making profit in its early days.
“We started in 2008 and were bootstrapped for the first couple of years, and we were profitable in those years, but then he (Bikhchandani) called me and said he wants to give me some money and we didn’t know how to use that money, but I had to use that money and it turned us into a loss-making company,” Goyal said. “Then he gave us more money, and it took us about seven years to recover from the funding he gave us.”
Zomato is engaged in a pitched battle with Prosus-backed Swiggy in both food-delivery and quick-commerce spaces with sector experts estimating Zomato to have a higher market share in the online food ordering segment.
Bikhchandani said a startup cannot withstand competition without funding, especially if the rivals are well-funded. “If you have a loss and a burn, but have a plan that you can execute well, you can get out of that situation,” the Info Edge India cofounder added.
