Explained: Why is Blinkit shutting down some dark stores?

Blinkit is learnt to have shuttered 50 of its dark stores across the country, resulting in hundreds from its workforce losing their jobs. Why is Blinkit facing a cash crunch?

Quick commerce delivery firm Blinkit is learnt to have shuttered 50 of its dark stores across the country, resulting in hundreds from its workforce, including dark store managers, pickers and delivery workers losing their jobs. This comes as the company looks for measures to reduce its burn rate amid a cash crunch.

🗞️ Subscribe Now: Get Express Premium to access the best Election reporting and analysis 🗞️

Why is Blinkit facing a cash crunch?

Sources told The Indian Express that Blinkit has also delayed payments to vendors for at least the last two months. Two Blinkit dark store managers confirmed that payments by the company have been delayed by an additional 10 days and said it has also directed stores to start servicing a larger radius of 6-7 km, up from the earlier 2-3 km.

“As of now, there does not seem to be a sustainable business model for quick commerce companies. Until they start charging users a delivery fee or introduce some kind of a membership subscription plan, it is unlikely that they will manage to improve finances from operations. That could be a potential reason behind why investors are hesitant to pump in additional capital into the company right now,” a top venture capital executive said, requesting anonymity.

Is the company raising capital?

In an internal note to employees last week, Blinkit co-founder Albinder Dhindsa said that the company has closed a fundraise of $100 million. Sources said that Blinkit raised the capital in debt from Zomato, and could raise an additional $300 million from the food-tech company this year. Zomato had previously invested $100 million in the company for a 10 per cent stake in August last year following which it had rebranded itself from Grofers to Blinkit with a specific focus on 10-minute deliveries. At the time, Blinkit had said it was closing its stores that were not prepared to deliver orders within 10 minutes. Queries sent to Blinkit and Dhindsa did not elicit a response at the time of publication.

How is the q-commerce space shaped in India?

Zomato’s biggest competitor Swiggy has its own grocery delivery services in the shape of Instamart, which is available as an integrated service on its native app. In addition to this, several other companies have entered the q-commerce segment, including Mumbai-based Zepto, Tata Group’s Bigbasket, ride-hailing company Ola, and Reliance Industries-backed Dunzo.

Story continues below this ad

Newsletter | Click to get the day’s best explainers in your inbox

Soumyarendra Barik

Soumyarendra Barik is a Special Correspondent with The Indian Express, specializing in the complex and evolving intersection of technology, policy, and society. With over five years of newsroom experience, he is a key voice in documenting how digital transformations impact the daily lives of Indian citizens. Expertise & Focus Areas Barik’s reporting delves into the regulatory and human aspects of the tech world. His core areas of focus include: The Gig Economy: He extensively covers the rights and working conditions of gig workers in India. Tech Policy & Regulation: Analysis of policy interventions that impact Big Tech companies and the broader digital ecosystem. Digital Rights: Reporting on data privacy, internet freedom, and India's prevalent digital divide. Authoritativeness & On-Ground Reporting: Barik is known for his immersive and data-driven approach to journalism. A notable example of his commitment to authentic storytelling involves him tailing a food delivery worker for over 12 hours. This investigative piece quantified the meager earnings and physical toll involved in the profession, providing a verified, ground-level perspective often missing in tech reporting. Personal Interests Outside of the newsroom, Soumyarendra is a self-confessed nerd about horology (watches), follows Formula 1 racing closely, and is an avid football fan. Find all stories by Soumyarendra Barik here. ... Read More