Fashion, grocery, and general merchandise to dominate two-thirds of Indian e-commerce market by 2027: Nykaa CEO Falguni Nayar

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March 19, 2024

Beauty and lifestyle e-commerce platform Nykaa‘s CEO and founder, Falguni Nayar, has stated that by 2027, fashion, general merchandise, and groceries will collectively constitute two-thirds of the Indian e-commerce market. Nayar highlighted that presently, fashion ranks as the second-largest online category, trailing only electronics.

“By 2027, it is expected that fashion, grocery, and general merchandise will capture two-thirds of the e-commerce market- showing large potential and room to grow.”

Nayar said that in today’s phygital (physical plus digital) world- understanding consumer patterns, behaviours and preferences is paramount in order to solve consumer concerns.

“When you peel back the onion on why consumers shop across e-commerce marketplaces & quick commerce vs offline stores- their motivations become clear,” she said at Startup Mahakumbh 2024.

Continue Exploring: Nykaa continues strong growth trajectory: Q3 net profit doubles YoY to INR 17.4 Cr

D2C (direct-to-customer) brands have the advantage of being quick-to-market and agile to adapt to changing trends – all while solving real consumer problems, she said.

“Of the new D2C brands over the last few years – 44 per cent have emerged in fashion & beauty,” she said.

As the world’s 5th largest economy, set to become the 3rd largest by 2030, she said the Indian economy is a canvas of boundless opportunities, and “the startup world is its vibrant palette, painting the landscape with bold strokes of creativity and ingenuity”.

The seasoned entrepreneur said that the country is witnessing an unprecedented surge in entrepreneurial activity, fueled by a generation of dreamers and doers who dare to challenge the status quo.

Nayar said, “We stand at the precipice of a new era in the Indian economy, one driven by innovation, resilience, and the indomitable spirit of entrepreneurship”.

“When you compare India to our counterparts, India is where China was 15 years ago. It is at this critical juncture where we notice a shift in consumption behavior. Given the S curve of the expected increase in per capita income from $2500 today to $5500 by 2030 – similar to China’s trends, we anticipate the BPC (beauty and personal care) per capita spend to go from $15 today to $50 by 2030. As a reference, Nykaa’s BPC spend is currently $80 vs the country’s average BPC spend of $15.”

Continue Exploring: Beauty and personal care tops D2C sales charts in 2023: GoKwik Report

Advising young startups and aspiring entrepreneurs, she said that one should remember that success is not measured solely by profit margins or market share. “It is measured by the lives you touch, the communities you uplift, and the legacy you leave behind. Let us embrace the spirit of innovation, collaboration, and inclusivity that defines our nation’s entrepreneurial landscape”.

Nykaa began with a dream to enable consumers to step into the spotlights of their lives, she added.

Malabar Investments in talks to secure INR 80-100 Crore stake in Sugar Cosmetics via secondary transaction

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March 19, 2024

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Malabar Investments, an India-focused investment fund, is in talks with early-stage backers of Mumbai-based Sugar Cosmetics, as reported by ET. They are discussing acquiring a stake in the company for INR 80-100 crore in a secondary transaction, according to sources familiar with the matter.

Should the deal be formalized, it is anticipated to value Sugar Cosmetics at around INR 2,900 crore (approximately $350 million). This transaction might involve partial exits from Sugar Cosmetics’ early investors, such as RB Investments and India Quotient, as well as some angel investors and family offices, according to the individuals mentioned previously.

“It is a part of a larger secondary sale exercise… Malabar Investments has held detailed discussions with the company and the investors to enter Sugar’s cap table,” one of the persons said.

In a secondary deal, the transaction occurs between existing and incoming investors, and the cash does not flow into the company itself.

Continue Exploring: BIA Brands bolsters skincare portfolio with acquisition of Asa Beauty

Another source mentioned earlier expressed that the omnichannel beauty retailer is interested in attracting an investor like Malabar Investments, known for acquiring stakes in companies that would pursue an initial public offering (IPO) in the near future.

“Malabar Investments coming in could pave the way for other pre-IPO investors to also come in… the broader contours are being finalised,” the person said. “A term sheet has been prepared but the proportion of which investor gets what exit is still being decided.”

RB Investments, an early supporter of the company since 2017, currently holds over 10% stake in Sugar Cosmetics, as per Tracxn data. Meanwhile, India Quotient holds approximately 11% stake.

Founded by former McKinsey executive Sumeet Nagar, Malabar Investments sees this potential deal as an opportunity to expand its portfolio with another consumer company. The firm has a history of supporting consumer-focused startups like Boat, Bombay Shaving Company, and Ixigo. Malabar Investments primarily focuses on investing in small and mid-sized public companies.

Sugar Cosmetics, established by the wife-husband duo Vineeta Singh and Kaushik Mukherjee, commenced its journey as an online-first direct-to-consumer (D2C) beauty brand before branching out into offline channels.

According to Tracxn data, the couple retains a 25% stake in Sugar Cosmetics, with investment fund A91 Partners holding 20.8%. Early-stage venture firm Elevation Capital maintains an 11% stake in the company.

Continue Exploring: Beauty brands step up investment in Women’s Premier League as celebrity endorsements and strategic partnerships drive momentum

Among the company’s other investors are L Catterton, which spearheaded a $50 million funding round for Sugar in May 2022. Additionally, Anicut Capital and the family offices of Pawan Munjal from Hero Group and Ajay Shriram from DCM Shriram are also investors in the company.

Queries to Malabar Investments, RB Investments, and India Quotient remained unanswered.

A spokesperson for Sugar Cosmetics said, “In the recent past, we have received strong interest from domestic and global private equity funds for equity investments in the organisation.”

The person added, “However, given that the company turned profitable in December of last year, there is no requirement for primary investment at present. In light of this, a few funds have engaged in conversation to actively explore the possibility of joining our cap table as shareholders via a secondary stake purchase.”

The spokesperson also mentioned that although a secondary purchase offer has not been finalized yet, it is expected to be “at a price higher than the company’s previous primary raise price.”

In May 2022, Sugar Cosmetics secured primary funds from L Catterton at a valuation of INR 3,000 crore.

“We also look at this opportunity to provide a significantly meaningful exit to some of our earliest investors…,” the spokesperson said.

Sources mentioned that the company has also engaged in discussions regarding raising fresh capital; however, these plans have been postponed for the time being.

“Sugar has been one of the first movers in the youth-focused colour cosmetics category, and has created a hold in that segment but with newer players entering the market it is becoming very competitive,” a person aware of the deal talks said.

In FY23, the company recorded an 89% year-on-year growth in operating revenue, reaching INR 420 crore. However, it is anticipated that the growth rate will moderate to 35-40% in the current fiscal year.

Continue Exploring: SUGAR Cosmetics’ FY23 sales surge by 89%, reaching INR 420 Cr; reports net loss of INR 76 Cr

“Sugar is also prioritising profits over revenue growth as it aims for an IPO in the next two to three years,” the person cited earlier said, requesting not to be named.

As per the same source, the company is projected to surpass INR 500 crore in revenue for FY24, while maintaining a negative EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of under 12%.

In recent years, Sugar has expanded its offerings by venturing into the low-cost cosmetics segment with its sub-brand, Sugar Pop, as well as introducing accessories and merchandise under the Sugar Merch Station brand. Additionally, in 2023, the company forged a joint venture with Bollywood actor Kareena Kapoor to introduce a skincare brand named Quench Botanics.

Continue Exploring: Kareena Kapoor partners with SUGAR Cosmetics as Co-Owner of Quench Botanics, the pioneering K-Beauty brand

Third Wave Coffee appoints former KFC CEO Rajat Luthra as new chief, Sushant Goel transitions to board role

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March 19, 2024

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Third Wave Coffee, a Bengaluru-based coffee QSR chain, has appointed Rajat Luthra, the former CEO of KFC India and Nepal, as its new CEO.

The startup additionally announced that its current CEO, Sushant Goel, will transition from his current position to become a member of the board.

The management change will become effective from Q1 FY25.

Established in 2016 by Sushant Goel, Ayush Bathwal, and Anirudh Sharma, Third Wave Coffee asserts its presence with 100 outlets across India. The startup mentioned in the statement that Goel would continue to steer its strategic course and spearhead new initiatives.

Commenting on the development, Goel said, “The brand is ready to embark on its next leg of growth. Now, as I transition to the board, I am excited to continue contributing towards our vision and growth from a different vantage point.”

With nearly thirty years of experience in the FMCG and QSR sectors, Luthra brings a wealth of expertise to the table. Over the past decade, he has served as CEO of KFC in India and Nepal.

The rejig comes months after Third Wave Coffee raised $35 Mn in its Series C funding round from private equity firm Creaegis and existing investors, including WestBridge Capital and Udaan cofounder Sujeet Kumar.

Continue Exploring: Third Wave Coffee raises $35 Million in Series C funding round led by Creaegis, plans to enhance cafe experience and expand technology innovation

In a joint statement, Westbridge Capital and Creaegis said, “As Sushant transitions to his new role on the board, we are confident that his guidance and strategic insights will continue to steer us towards even greater success… Together, under Sushant’s continued guidance and Rajat’s leadership, we are poised to embrace new opportunities and drive the company to new heights.”

Third Wave Coffee rivals brands such as Blue Tokai and Slay Coffee, while also contending with global giants like Starbucks and Tim Hortons.

As an FMCG brand, it also competes with various direct-to-consumer coffee brands, including Rage Coffee and Sleepy Owl.

Recently, Third Wave Coffee underwent a restructuring exercise, resulting in the layoff of around 10% of its workforce, despite having raised funds just months prior.

Continue Exploring: Fresh off its $35m funding, Bengaluru-based Third Wave Coffee lays off 10% of staff

MTR Foods celebrates centenary with record-breaking 123-foot Dosa

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March 18, 2024

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When seeking a nutritious and delightful breakfast option, Dosa stands out without fail. Crafted from a batter of fermented rice and urad dal, this iconic dish, known as Dosai in South Indian cuisine, is expertly cooked on a non-stick pan with just a touch of oil or ghee. Whether it’s the classic Paper Dosa or the innovative Paneer Dosa, the versatility of this dish has led to over a hundred enticing variations available today.

In a recent achievement, this dish secured a Guinness World Record when a colossal 123-foot-long Dosa was meticulously crafted in Bengaluru. This culinary feat was accomplished by a team of 75 chefs from MTR Foods in collaboration with Lormann Kitchen Equipment, marking a highlight of the company’s centenary year celebrations at the Bommansandra plant in Karnataka. Surpassing the previous record of 16.68 meters (54 ft 8.69 in), this monumental Dosa measured an impressive 37.5 meters in length.

Chef Regi Matthew, who acted as the head chef, also uploaded a video on his social media and captioned it as, “M thrilled to announce a historic milestone at MTR! Proudly celebrating the 100th year anniversary with a Guinness World Record title for the longest dosa, measuring an incredible 123.03 feet! This monumental achievement took place at the MTR Factory in Bengaluru on March 15th, 2024.”

Chef Matthew also thanked the M S Ramaiah College of Hotel Management, whose students took part in this event and wrote, “Here’s to a century of tradition, flavour, and breaking records!”

Continue Exploring: Swiggy reveals fascinating insights ahead of World Dosa Day: 29 Million dosas delivered in past year, Bangalore leads dosa consumption

Crafted with their distinctive red rice batter, this Dosa stands as a testament to innovation and perseverance, marking the longest in its lineage. Months of meticulous effort and strategic planning preceded its creation. The dedicated team behind this culinary marvel comprised seasoned food experts and culinary school personnel, who endured approximately 110 unsuccessful trials before achieving this remarkable feat. Following the record-setting moment, the colossal Dosa was generously shared among local school students, residents in the vicinity, and MTR employees. This ambitious endeavor was meticulously executed under the expert guidance of MTR’s Cuisine Center of Excellence.

Entrepreneurial drive should stem from passion, not profit: Zomato CEO Deepinder Goyal

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March 18, 2024

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Zomato CEO Deepinder Goyal on Monday advised entrepreneurs to be led by passion and drive while building the company of their dreams, and cautioned that starting a venture with the sole desire of making money won’t work and may lead to “bad governance calls”.

Speaking at the Startup Mahakumbh event, Goyal spoke candidly about how his own company prefers to be always paranoid to stay ahead. Complacency should not kick at any point of time, he asserted.

“I see a lot of founders starting a lot of companies, and I ask them why did you start this company, and the answer is ‘I want to make a lot of more money’…I don’t think that works because that leads to bad governance calls… that’s not the purpose with which you should start a company,” he said while addressing a packed hall.

Continue Exploring: Blinkit to outgrow Zomato within a year, says CEO Deepinder Goyal

He advised aspiring and new entrepreneurs, “You should be so passionate about something, you should be willing to risk your life for it, only then you are able to build a company of your dreams.”

“That’s the only piece of advice I have… do it with passion, don’t do it for money,” he said during a fireside chat with Info Edge founder Sanjeev Bikhchandani.

Bikhchandani advised entrepreneurs and startups to be frugal and hands-on, and always connected to the market and consumers.

Goyal emphasised that continuous innovation is “must” for businesses, as no business model can survive for more than a decade or two without innovation.

Further, he said that anyone looking to start a company and turn an entrepreneur with an objective of being “comfortable” and “happy” would be making a “wrong choice”.

“You have to learn to handle the stress to succeed. The only way to lose is to quit…if you can survive, you’ll win,” he advocated.

Continue Exploring: Startup Mahakumbh to showcase India’s agritech potential with exclusive pavilion and key industry insights

Baazar Style Retail initiates IPO process, files draft papers with SEBI

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March 18, 2024

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Value fashion retailer Baazar Style Retail Ltd has filed preliminary papers with capital markets regulator Sebi to raise funds through an Initial Public Offering (IPO).

The proposed IPO is a combination of a fresh issue of equity shares worth INR 185 crore and an Offer for Sale (OFS) of up to 1.68 crores by promoter group entities and other selling shareholders, Draft Red Herring Prospectus (DRHP) filed with Sebi showed.

Under the OFS, Rekha Rakesh Jhunjhunwala will sell 27.23 lakh equity shares, Intensive Softshare Private Limited will offload 22.40 crore shares and Intensive Finance Private Limited will divest 14.87 lakh shares among others.

The offer includes a reservation for subscription by eligible employees.

Going by the draft papers filed on Friday, the Kolkata-based company may consider raising INR 37 crore in a pre-IPO placement round. If such placement is completed, the fresh issue size will be reduced.

Continue Exploring: Shein considers London IPO amid US listing hurdles

Proceeds from the fresh issuance to the extent of INR 135 crore will be utilised for payment of debt and general corporate purposes.

Bazaar Style Retail is one of the leading players in the value retail market in West Bengal and Odisha.

Additionally, its other core and focus markets include Assam, Bihar, Jharkhand, Andhra Pradesh, Tripura, Uttar Pradesh and Chhattisgarh.

As of December 31, 2023, the company had 153 stores.

Baazar Style Retail clocked a profit of INR 5.10 crore in the financial year 2023 as compared to a net loss of INR 8.01 crore in the previous year.

Its revenue from operations during the fiscal year 2023 increased significantly to INR 787.90 crore from INR 551.12 crore in the previous year.

Axis Capital, Intensive Fiscal Services, and JM Financial are the book-running lead managers to the issue.

Continue Exploring: German perfume retailer Douglas set to unveil IPO plans despite market uncertainty

Zomato among Jefferies’ top picks for next five years, anticipates 2.5X share price increase by 2029

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March 18, 2024

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Zomato has secured a spot among Jefferies‘ “top picks” for the next five years, with the brokerage predicting a 2.5X increase in the foodtech startup’s share price by March 2029.

Jefferies anticipates Zomato’s stock to climb to INR 400 from its current value of approximately INR 160.

The listed Indian startup has been mentioned in the list alongside the likes of Ambuja Cement, Axis Bank, Bharti Airtel, JSW Energy, L&T, Max Healthcare, SBI, TVS Motors, Amber, and Macrotech.

“Low penetration levels in core segments offer a long runway to growth with both food delivery (19% GOV CAGR over FY24-30) and quick commerce (40% CAGR) expected to jump,” said Jefferies analysts on Zomato’s growth potential.

They anticipate a 20-fold increase in profit during the FY24-FY30 period and foresee the stock yielding over 150% returns within this timeframe.

Meanwhile, according to a research note from UBS, Zomato’s year-on-year growth is expected to remain robust, in line with the company’s guidance of over 20%.

The brokerage has upheld its ‘buy’ rating and set a price target (PT) of INR 195 on Zomato, indicating an upside of nearly 22% from the stock’s last Friday close. However, UBS reportedly expects some downside to the consensus gross merchandise value (GMV) estimates.

Continue Exploring: Zomato’s strong Q3 performance spurs brokerage firms to boost price targets; Blinkit expansion drives optimism

Zomato’s shares surged approximately 3% to INR 164.45 on the BSE during early trading on Monday (March 18). However, they later pared most of their gains and were trading 0.7% lower at INR 158.75 by 3:10 PM IST.

It’s worth mentioning that Zomato stated in a filing on Saturday that it received a penalty notice for Goods and Services Tax (GST) from Gujarat’s Deputy Commissioner of State Tax, relating to FY19.

The company has been instructed to pay a total amount of INR 8.58 Cr, including interest and penalty charges.

Continue Exploring: Zomato faces INR 8.6 Cr GST penalty notice from Gujarat State Tax Authority

In a research note last week, HSBC raised its price target (PT) on Zomato to INR 200 from INR 163. This adjustment currently suggests a potential upside of over 25%, driven by the heightened expectations for Blinkit‘s order growth rate.

Propelled by the company’s three consecutive profitable quarters, Zomato’s shares have surged over 29% year to date.

Continue Exploring: Zomato reports third consecutive profitable quarter with INR 138 Cr PAT in Q3 FY24

Jumbotail raises INR 151 Crore led by Artal Asia in Series C3 funding round to revolutionize kirana retail ecosystem

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March 18, 2024

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Jumbotail, the B2B marketplace and retail platform, has successfully raised INR 151 crore ($18.2 million) in its Series C3 equity funding round. The funding was spearheaded by Artal Asia, a venture capital firm based in Singapore. Other participants in the round include Heron Rock, Sabre Investment, Arkham Ventures, Jarvis Reserve Fund, Reaction Global, and VII Ventures.

The Bengaluru-based startup will utilize the funding to expand its suite of go-to-market products and assist new and emerging brands in reaching the masses through its nationwide network of kirana stores, as stated in a release.

Founded in 2015 by S Karthik Venkateswaran and Ashish Jhina, Jumbotail operates as a full-stack B2B marketplace, providing a range of services including tech-driven warehousing and a last-mile delivery supply chain network tailored to small and medium enterprises. Additionally, the company facilitates next-day storefront deliveries to kirana stores and offers a fintech platform for payment solutions, credit options, and financial services to kirana store owners.

Continue Exploring: Innovative strategies propel ShopKirana’s revenue, aiming for INR 1,000 Crore run rate in FY24

Jumbotail is currently developing artificial intelligence-driven technologies aimed at increasing customer wallet share within the FMCG and staples sectors, as well as optimizing kirana supply chains.

According to the company, it boasts a 60% penetration rate in kirana stores across the cities it operates in, holding the highest wallet share and monthly purchase frequency among small and medium-sized kirana stores in the industry. Jumbotail highlights that nearly all of its sales, approximately 100%, stem from unassisted digital orders placed directly by kirana stores nationwide through the Jumbotail B2B digital retailer app.

In total, Jumbotail has secured $143 million in equity funding from notable investors such as Artal, Heron Rock, Nexus Ventures, Kalaari Capital, Jumbo Fund, and Arkam Ventures. Additionally, the company has obtained approximately $14 million in venture debt from prominent venture debt firms Alteria Capital and Innoven Capital.

Continue Exploring: FMCG companies and Kirana stores gear up for summer: Dairy and beverage sales spike across India

“We are excited to see Jumbotail execute sustainable growth at scale, with a strong focus on profitability and capital efficiency. Since Artal’s first investment in Jumbotail in 2021, Jumbotail has continued to demonstrate its differentiation and market leadership in the digital enablement of the kirana ecosystem,” Benjamin Felt, Board Member of Jumbotail and Managing Director of Invus (the global advisor of Artal), said.

In FY23, Jumbotail reported a loss of INR 264 crore, nearly doubling from INR 124.7 crore in the prior year. Despite this, its revenue from operations surged to INR 819 crore, reflecting a remarkable 117% increase compared to the previous fiscal year when it amounted to INR 377 crore.

Continue Exploring: B2B fruit marketplace Vegrow raises $46M in Series C funding for nationwide expansion

Swiggy launches ‘Delivering Safely’ campaign to ensure safety of delivery partners across India

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March 18, 2024

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Swiggy has launched a nationwide road safety campaign named ‘Delivering Safely,’ reaffirming its commitment to prioritizing the safety of its delivery partners.

Being a leading entity in food, quick commerce, and diverse on-demand services, Swiggy operates with a vast network of over 300,000 delivery partners spanning across more than 600 cities nationwide.

Annually, Swiggy’s delivery partners collectively traverse an astounding distance of 3.6 billion kilometers, which is roughly equivalent to making 90,000 trips around the Earth’s equator.

Over recent years, Swiggy has been actively involved in increasing awareness among its delivery partners, streamlining the reporting process for safety incidents, thereby enabling Swiggy to swiftly take necessary actions.

Continue Exploring: Swiggy provides significant insurance benefits to delivery workers, settles claims worth INR 31 Crore

Rohit Kapoor, CEO of Food Marketplace, Swiggy, said, “Swiggy’s mission is rooted in making urban life more convenient for our customers. Improving road safety in our cities is not just a goal; it’s a necessity for enhancing the daily lives and safety of everyone. Congestion is a genuine concern, and as providers of food delivery, quick commerce, and other on-demand services, we believe we’re playing a practical role in alleviating this issue.”

Swiggy ensures comprehensive support for the safety and well-being of its delivery partners through a range of initiatives. This includes accidental medical coverage, offering INR 2 lakh for medical expenses and INR 10 lakh as death cover, with over INR 31 Crores disbursed in insurance claims during FY23.

Furthermore, Swiggy has pioneered an on-demand ambulance service, a first in the industry, with an average response time of 11 minutes, catering to the needs of its delivery partners and their families.

Continue Exploring: Swiggy facilitates INR 102 Crore worth of loans to delivery partners in one year

In case of any incident, Swiggy ensures delivery partners receive a guaranteed minimum income to assist in their recovery, matching the average earnings in their respective cities.

Road safety awareness workshops are conducted in collaboration with state traffic police departments by Swiggy to promote safe driving practices, complemented by access to advanced safety gear.

Moreover, Swiggy is in the process of developing an advanced telematics project aimed at monitoring driving behaviors. This initiative will enable the company to provide specialized training to delivery partners identified as at-risk, utilizing data analysis.

Blinkit to outgrow Zomato within a year, says CEO Deepinder Goyal

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March 18, 2024

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Zomato Co-Founder and chief executive Deepinder Goyal stated on Monday that the company’s quick-commerce platform Blinkit will outgrow its mainstay food-delivery business within a year. Goyal made these remarks at the government of India-organised Startup Mahakumbh, a three-day event where startup founders are discussing how policy formations can enhance India’s global ranking in innovation.

The food-delivery giant has grand plans to extend Blinkit beyond grocery delivery into the realm of e-commerce. Snackfax reported on March 4 that Zomato’s Blinkit and Mumbai-based Zepto are diversifying into categories like electronics, fashion, and home appliances, resembling mainstream e-commerce platforms.

Continue Exploring: Quick commerce platforms Blinkit and Zepto expand into e-commerce, targeting fashion, beauty, electronics, and more

Emphasizing the rapid evolution of technology, Goyal remarked that none of the business models devised today are likely to endure beyond a decade or two.

“It’s harder to create a generational company today than a few decades ago because of technology,” he said.

In reply to a query from Sanjeev Bikhchandani, co-founder of Info Edge India and a member of the organizing committee, as well as the earliest institutional investor in Zomato, Goyal emphasized that Zomato has evolved significantly from its inception 16 years ago.

“This is Zomato’s fourth version,” the founder said.

The Startup Mahakumbh event anticipates the participation of over 40 unicorn startups, with founders from notable companies like Lenskart, Boat, Dream11, Oyo, Razorpay, Zerodha, Acko, Moglix, Urban Company, and Nykaa.

Continue Exploring: Startup Mahakumbh to showcase India’s agritech potential with exclusive pavilion and key industry insights

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