Zomato shares were on the up on Wednesday afternoon after a media report claimed that the food delivery giant-owned, quick commerce company, Blinkit plans to launch services that compete with the likes of Urban Company.
What Happened? Zomato chief Deepinder Goyal resigned as a board member of Urban Company which is a Delhi-based unicorn that operates in the home services category.
While Goyal hasn’t penned a reason for his exit, two sources close to Zomato have told Entrackr that the move is directly linked to Blinkit’s entry into the home services category that Urban Company currently leads.
“Goyal resigned as the new vertical will compete with UC and there would be a direct conflict of interest," said a source.
It is worth noting that Blinkit has already started offering home chef services through a Gurugram-based company called ChefKart. However, it isn’t known what will be the shape and form of Blinkit’s new foray.
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“It might also be just advertising on the Blinkit platform… Also, there’s no clarity yet on which specific services will be there,” a source tells Entrackr.
The quick commerce platform has been a pain point for Zomato since its acquisition in August 2022 in terms of profits. Blinkit recorded Q3 FY23 losses at ₹288.5 crore, according to Zomato's quarterly results.
That said, Blinkit did manage to narrow its adjusted EBITDA to ₹227 crore from ₹259 crore on a sequential basis.
The instant delivery platform also recorded 31 lakh transacting customers in Q3, up from 26 lakh in the previous quarter.
Price Action: Zomato shares were trading 2.61% higher at ₹55 on Wednesday afternoon.
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