Foodtech Giant Zomato Raises $150 mn From an Alibaba Affiliated Investor

0
606

Zomato is raising $150 million from investor Ant Financial, an Alibaba associate, at the cost of $3 billion for the food delivery start-up. The latest funding from enduring investor Ant Financial values Zomato at $3 billion, Info Edge, the origin of Zomato, stated in a statement to stock markets. Info Edge’s stake in Zomato after the transaction is likely to be decreased to 25.1% from 28% previously, the firm said.

The fund immersion comes as Zomato struggles for a bigger market share in the very competitive food delivery space in competition with competitors such as Tencent-backed Swiggy and Uber’s UberEats.

Zomato reinforced that the $150 million fundraise was a portion of a larger round, but did not provide further details. The Gurugram-based restaurant aggregator reported a loss of $294 million in the year closing March, compared with a decline of $12 million a year earlier as it consumed more money in its Indian delivery company to grab new customers, unaudited figures from its yearly report registered.

The fund immersion comes at a time when Zomato is in conversations with Uber Technologies to acquire the ride-hailing service’s local food distribution arm Uber Eats. The movement is likely to help Zomato enlarge its market share as well as thrust deeper into the Uber Eats’ premium client base in India. The ultimate deal, including the fundraising, is expected to be finished by March, the person said.

India’s food delivery business has been hyper-competitive, often driving delivery services to offer dynamic price discounts and engaging promotional incentives. Zomato has so far amassed $700 million in addition to the extra funding from Ant Financial.

The company is encountering intense competition from rival Swiggy, supported by South Africa’s Naspers, and the rival landscape is set to worsen with the roll-out of Amazon’s delivery setting.

According to Edelweiss Securities, Zomato and Swiggy are consuming 1.2 billion rupees ($17 million) and 1.5 billion rupees every month, respectively, toward betterment in a bid to grow market share.

Both the groups have been measuring 40 million orders per month, indicating Zomato’s takeover of Uber Eats will allow it to jump past Swiggy in terms of market share.

According to the food-tech field, the start-up’s current capital burn is $15 million per month. Nevertheless, in FY19 the Gurugram-based food delivery company’s losses extended from Rs 106 crore in FY18 to Rs 1,001 crore in FY19, noting a 9.4X growth. Along with this, in FY19, Zomato’s revenue rose to Rs 1,397 crore, registering a 188-percent jump from the revenue of Rs 485 crore it listed for the previous financial year.

Earlier in December, Zomato Founder & CEO Deepinder Goyal had stated that the firm would raise $500-$600 million in the following six months to fuel its objectives in food delivery, eating out and sustainability. However, he did not reveal any more details.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.