Business

Goldman Sachs Says Blinkit Is More Valuable Than Zomato’s Food Delivery Business

The meal delivery business of Zomato is no longer worth as much as the implied value of Blinkit, the problematic rapid commerce startup that Zomato purchased in a fire sale in 2022, according to a note released on April 25 by Goldman Sachs analysts.

Everything is looking bright for Blinkit; it went from being an albatross around Zomato’s neck to becoming its largest division. Zomato’s shares fell 20 percent in 2022 after the company revealed its intention to buy Blinkit (formerly Grofers), as investors perceived the move as a rescue. All the same, the corporation remained upbeat and seems to have fulfilled its commitments.

Goldman Sachs analysts state that although Blinkit was purchased by Zomato for $568 million in 2022, its estimated valuation has subsequently increased to an astounding $13 billion due to greater performance. Furthermore, the valuation has increased by more than 6X year over year (YoY).

“We have observed that Blinkit’s implied valuation in our Zomato sum of the parts (SOTP) is approximately $13 billion at present, as opposed to $2 billion in March 2023. Additionally, the note notes that the implied value per share is Rs 119 higher than food delivery, at Rs 98, for the first time.”

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According to a story on April 4, Goldman Sachs’ initial estimate of $8 billion was downgraded to $13 billion for the fast e-commerce delivery player. Goldman Sachs stated that the upgrades were a result of increased gross order value (GOV) forecasts for Blinkit, which are projected to be roughly 50% higher than those from a year ago.

Goldman Sachs predicts that between the fiscal years 2024 and 2027, the fast delivery company’s GOV will likely rise at a compound annual growth rate (CAGR) of 53%. According to the statement, this will also propel Zomato’s adjusted revenue CAGR to 32% on a consolidated basis.