The head of India’s biggest quick commerce player says the sector is hurtling toward a shakeout as rivals’ cash dries up, but that his start-up will thrive — and continue its expansion, Bloomberg has reported.
A model that has so far relied on relentless fundraising is nearing its limits and companies will soon have to decide how long they can keep absorbing steep losses, Blinkit CEO Albinder Dhindsa said in an interview.
Global investors, including SoftBank Group, Temasek Holdings and West Asian sovereign funds, have poured billions into the sector, making it the world’s most closely watched experiment in rapid deliveries. Similar ventures across the US, Europe and other parts of Asia have unravelled. India’s dense cities, lower cost of labour and ubiquitous digital payments offer an edge, but the economics depend on logistics efficiency and continued access to capital.
Investors have been cautious even as funding needs climb. Swiggy, Blinkit’s smaller rival, is preparing a $1.1 billion share sale barely a year after its $1.3 billion market debut — at roughly the same price as its IPO price. Competitor Zepto has raised $450 million ahead of a planned initial public offering next year.
Both situations underscore the cash required to fuel deliveries of everything from eggs to iPhones in 10 minutes.
“Usually when this kind of imbalance exists, the correction is very swift,” Dhindsa told Bloomberg News. “It often catches people by surprise.”
Swiggy’s upcoming QIP sale — its stock still trades close to its IPO price — shows how investors are rethinking the risks of a business long propped up by easy capital used to fuel rapid expansion.
A correction could remake India’s consumer tech landscape, testing how much demand for fast deliveries is driven by discounts and which firms have created differentiated services people are willing to pay more for.
Analysts at Bernstein Societe Generale Group last month said Eternal-owned Blinkit has emerged as the long-term frontrunner, citing execution, strong unit economics and more than $2 billion in cash. Still, they warned that rising competition could force heavier investment before the company turns free cash flow positive. Blinkit remains unprofitable, despite its cash pile, as it keeps investing to enter new markets.
Swiggy QIP
Swiggy on Tuesday launched its qualified institution placement (QIP), with sources indicating an issue size of ₹10,000 crore ($1.11 billion).
According to the sources, the indicative floor price for the QIP has been set at ₹371 per share, representing a discount of 6.8 per cent to the last closing price of ₹398.05.
