In a surprise move, Zomato's board has approved a plan to raise $1 billion from institutional investors, just weeks before its rival Swiggy's highly anticipated IPO. This significant capital injection is seen as a strategic play to gain a competitive edge in India's rapidly growing quick-commerce sector.

The fundraising effort is notable, given Zomato's existing $1.2 billion cash reserves. Analysts believe the move may be aimed at reducing foreign institutional investor ownership in Zomato, effectively transforming it into a "domestic" company. This shift could enable Blinkit, Zomato's quick-commerce subsidiary, to adopt an inventory-based model in India, giving it tighter control over stock and allowing for more calculated risk-taking in launching new categories.

The quick-commerce market in India is expected to generate annual revenues of over $6.5 billion, with Zomato currently leading the market through Blinkit. The sector has disrupted traditional e-commerce business models and exceeded market expectations, with intense competition from Swiggy, Zepto, and BigBasket.