INDIA – Haryana based food delivery service, Zomato has received US$39.75 million (Rs 284 crore) from US-based Glade Brook Capital Partners in a race to become the leading food and restaurant discovery service in India.
According to documents sourced from Paper.Vc., Zomato issued 13,000 class 1 preference shares to Glade Brook for the fund infusion.
Glade Brook whose portfolio firms include Uber, Airbnb and Snapchat received ‘compulsorily convertible cumulative preference shares’ for Rs 2,18,790 per share.
The funding is part of Zomato’s series I round of funding which has also received backing from Alibaba group affiliate Ant Financial.
The funding round started in November 2018 and has so far received US$210 million Ant Financial, according to estimates by the Paper.Vc.
Zomato is garnering muscle to battle online delivery firms like Swiggy, Uber Eats and Ola-owned Foodpanda, which are also betting big on the online food ordering and delivery market in the country.
Swiggy, said to be close competitor to Zomato has raised upto US$1 billion to stay at a better competitive edge in a market that is clocking over 40 million orders a month.
Both Swiggy and Zomato are said to be losing US$30-40 million each a month as they offer discounts to customers and incentives to delivery personnel, even as they face competition from ride-hailing companies Ola and Uber which are pushing in this market.
Zomato is also in talks to sell its UAE business to Germany’s Delivery Hero with the divestment targeted to raise between US$250 million to US$500 million.
It has also held talks with Chinese private equity player Primavera Capital for a new round to the tune of $500 million- US$1 billion, but a deal has not been finalised.
Zomato was founded by Deepinder Goyal and Pankaj Chaddah in 2008 and provides in-depth information for over 1.4 million restaurants across 24 countries and serves more than 50 million users every month.
Its latest investments in technologies like artificial intelligence and data science are aimed at increasing market share while combating rivalry in India where online delivery service is fast expanding.
Last December, the company acquired drone start-up TechEagle Innovations, for an undisclosed sum.