Exclusive: Zomato may extend $75-100 million debt to rescue cash-strapped Blinkit

Blinkit, which spent Rs 600 crore between November and February to expand the business and acquire customers in the cash-guzzling and deep-discounted grocery delivery space, is now looking to cut costs and has reduced its cash burn, these people said.

"They had signed up a lot of dark stores which they are not going to use. They have been checking with rival companies if anyone is interested in buying the infrastructure at depreciated rates," said one of the sources quoted above.

The company currently has close to 445 dark stores after shutting down approximately 40 of them in the last couple of months.

Blinkit which was on its way towards a rapid expansion has also started witnessing a slowdown in order growth in recent months. According to sources, from 2.8 million orders in November, it reported a massive surge with over five million orders in January. However, the two consecutive months thereafter have witnessed just 4 percent month-on-month growth. As of now, the company is delivering around 190,000 orders every day.

The company also faced complaints on social media for promising lightning-fast grocery delivery and then for not being able to commit to its promises many times, in the last few months. Customers alleged that their orders were shown as delivered even though they didn't get any delivery in the stipulated time.

"They are not setting up any new facilities. Instead, the existing dark stores have been asked to utilise their full capacities," said another source confirming that a vendor who works with Grofers has also been facing delay in payments.

"Earlier the payment used to happen in 30 days of raising the invoice. Now that is being delayed to 45-50 days," said the person quoted above.

While the company did not respond to a detailed set of questions, it confirmed that its fundraise was happening and it was taking efforts to rationalise costs.

"Our business has grown 2.5x since November. Our fundraising is on track, and we continue to hire in key positions, while we also continue to remove costs that are now redundant due to a pivot in our business from a next-day grocery service to a 10-minute e-commerce business," a spokesperson said.

Swiggy, which also counts SoftBank as an investor, is investing $700 million in its express grocery delivery business Instamart, throwing down the gauntlet to rivals.

Apart from Blinkit, Swiggy, Zepto, Google-backed Dunzo, Walmart-owned Flipkart, Amazon, Tata-owned BigBasket, and Reliance-JioMart are all hankering after quick commerce, as more Indians shop for daily essentials online.

Zomato did not comment for the story.