Ant Financial backed foodtech unicorn Zomato to raise US$600m in fresh funding

INDIA – Food ordering and delivery platform, Zomato is in the process of raising US$600 million in a fresh funding round to fuel its food delivery and dining out operations.

According to an ET Retail update, the fresh funding round is likely to be led by its existing Alibaba’s payments affiliate, Ant Financial.

The Chinese investor is anticipated to inject about US$200 million, a deal that make Ant Financial the largest shareholder in Zomato at 29 per cent stake.

Singapore’s state investment arm Temasek is also expected to pump in significant capital into the round, which is expected to value Zomato at a whopping US$3 billion up from about US$2 billion valuation when it last raised funding earlier this year.

The development comes at a time when its arch-rival, Swiggy, is also reportedly in advanced stages of closing a US$700-750-million round led by existing investor Naspers.

Zomato raised about US$40 million from US investor Grade Book Capital Partners in February this year as part of the Series I round, where the firm raised US$210 million from existing investor Ant Financial in October last year.

In the first six months of the current financial year, Gurugram-based Zomato said its revenue grew by 225% to US$205 million while managing to reduce its burn rate by about 40%, compared to the same period last year.

Zomato says that it clocked 214 million orders worth US$821 million during the period ending in September 2019, transalting to an average monthly 36 million online orders during theperiod.

Zomato is now present in over 500 cities across the country. Order volumes have doubled in the top 15 cities in the last year, while the remaining cities are contributing 35 per cent of order volumes, the firm said in a report.

““We achieved tremendous results in optimising our costs, without affecting new product launches or innovation.

“The number of restaurant listings globally on Zomato has grown from 1.2 million in September 2018 to 1.5 million in September 2019. Half of this increase comes from India alone,” the company added.

Founded in 2008, the foodtech unicorn has over the years diversified itself from restaurant search company to food delivery company, and currently, the startup has expanded to 24 countries and serves 10,000 cities globally.

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