Indian online food delivery platform Zomato has proposed to acquire local grocery delivery start-up Blinkit for Rs44.47bn ($568.16m) in an all-stock deal.

Backed by SoftBank Group, Blinkit delivers groceries and other essentials to customers.

The company also facilitates the last-mile delivery of products from dark stores in a delivery radius of typically less than 2km.

Formerly known as Grofers, Blinkit reportedly has a presence in more than 20 Indian cities, but has largely focused on its top 15 cities.

The quick commerce platform delivers a variety of products, ranging from milk, eggs, fruits and vegetables to electronics.

Last month, it recorded a gross order value of Rs4.02bn.

In a statement to shareholders, Zomato founder and CEO Deepinder said: “Quick commerce has been our stated strategic priority (for the last year).

“We have seen this industry grow rapidly both in India and globally, as customers have found great value in quick delivery of groceries and other essentials.

“This business is also synergistic with our core food business, giving Zomato the right to win in the long-term.

“We are proposing to acquire Blinkit, a quick commerce business in India (in which) we first invested in August last year.

“This foray into the next big category is timely as our existing food business is steadily growing towards profitability – Zomato has grown at a combined annual growth rate (CAGR) of 86% in the last four years to an adjusted revenue of Rs55.4bn while the adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margin has improved from 153% in FY19 to 18% in FY22.”

The deal is expected to complete in early August this year subject to receiving shareholder and stock exchange approval.

In September last year, Zomato announced it had decided to cancel its grocery delivery service due to order fulfilment gaps and poor customer experience.