Zomato's QIP pricing; qcomm’s bulk orders

Happy Tuesday! Zomato opened its much-talked about qualified institutional placement (QIP) which expects to rack up Rs 8,500 crore as the quick commerce battle intensifies. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ IT firms scout for new markets
■ Incubate Fund’s India plans
■ Angel One top exec resigns

Zomato QIP: company sets floor price at Rs 265.91 per share

A delivery worker of Zomato waits to collect order outside an eatery in Kolkata

Zomato has set a floor price of Rs 265.91 per share for its QIP, which it opened on Monday. Through this, the food and grocery delivery company is planning to raise up to Rs 8,500 crore.

Driving the news: The floor price for the QIP is at a nearly 3% discount to Zomato’s Monday close of Rs 273.60 per share on the BSE. The company’s shareholders had approved the plan on November 23.

Fine print: According to the QIP’s preliminary placement document, Zomato will use the Rs 8,500 crore to expand the footprint of its quick commerce unit Blinkit, and on advertising and marketing. It said it will use Rs 2,137 crore on “expenditure towards setting up and running operations of dark stores and warehouses”.

Also Read: Zomato’s QIP salvo before Swiggy IPO will further fuel quick commerce frenzy

zomatos financial snapshot graphic oct 2024 ttech.

Qcomm battle: As the quick delivery sector heats up, the dominant players are expanding their dark store network.

Blinkit plans to have 1,000 dark stores by end of the ongoing fiscal, and 2,000 such stores by end of 2026.
Zepto is also planning to operate over 700 dark stores by the end of FY25
Swiggy Instamart aims for its dark store count to grow to 741 from around 557 as of June 30

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Zomato’s Goyal extends salary waiver: Zomato founder & CEO Deepinder Goyal has extended his salary waiver for an additional two years, opting not to draw compensation until March 31, 2026, the company disclosed in its QIP document.

Also Read: ETSA 2024 | Zomato’s top ranks needed a spring clean after IPO highs: Deepinder Goyal

Goyal had previously forgone his salary for 36 months, beginning April 1, 2021, as outlined in the food delivery giant’s FY24 annual report. This latest extension means he will not draw a salary for a total of five years.

Also Read: Deepinder Goyal’s controversial job posting for chief of staff receives flak online

Quick commerce firms dangle discounts for bulk buys above Rs 1,000 cart size

Quick commerce platforms are adding categories non grocery categories ecommerce THUMB IMAGE ETTECH

Quick commerce platforms are shifting gears, encouraging bulk purchases by offering higher discounts for larger cart sizes.

Driving the news: Quick commerce companies are now offering higher-than-usual discounts on minimum orders of Rs 1,000-1,500, with the aim to improve unit economics.

Tell me more: BigBasket’s BBNow offers discounts for orders above Rs 1,500, while Zepto provides deals for carts exceeding Rs 1,000 (Rs 799 in some locations). Flipkart, too, has extended its wholesale service to its main app. This strategy mirrors value retailers like Dmart, catering to bulk-buying habits.

Dig deeper: Average order values (AOVs) for quick commerce players remain low and haven’t grown at a rapid pace. A Morgan Stanley report shows only 51% of quick commerce users have AOVs over Rs 750, compared to 70% for online and offline retailers.

Same coin: While customers ordering in bulk save money, this strategy results in cost savings for the platforms in terms of fewer delivery trips and reduced packaging expenses.

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Read our in-depth coverage of the quick commerce sector:

IT exporters go beyond North America & Europe

India’s top software service exporters, including TCS, Infosys, and Wipro, are turning to markets like Japan, West Asia, Australia, Asia Pacific (APAC) as well as the home market India to offset slowing growth in traditional strongholds such as North America and Europe.

What’s happening: Tech giants are fixing their strategies amid stagnant US enterprise spending and growing macroeconomic uncertainty. With US enterprise clients contributing roughly half of India’s $254 billion software service exports, companies are seeking diversification to future-proof their operations.

Keeping tabs: TCS has outlined long-term growth bets in India, Latin America, and West Asia, projecting these markets as enduring engines for expansion over the next two decades. While profitability in emerging markets may initially lag behind the US and Europe, scale and cost efficiencies are expected to balance the equation over time.

Japanese fund Incubate looks to take Indian solutions to Japan, Southeast Asia markets

Masahiko Homma, cofounder, Incubate Fund

Masahiko Homma, Nao Murakami and Rajeev Ranka from Tokyo-based Incubate Fund, one of the largest seed-stage funds in Japan, spoke with ET in Bengaluru recently laying out their plans for the country’s growing fintech ecosystem.

On the global opportunity: Indian fintechs are operating at a scale which can help companies in Japan and other Southeast Asian markets improve their operations in multiple other geographies. Incubate Fund invests in such startups through the SMBC Asia Rising Fund to help them scale up.

Investment thesis: Over the last few years, the fund has been actively picking up seed-stage deals in India through its Incubate Fund Asia. It closed its third fund with a $30 million corpus earlier this year. Now, it wants to invest in growth-stage fintech startups as well through the SMBC Asia Rising Fund, a $200 million fund.

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