India’s Food tech Unicorn Zomato to raise $146m in preparation for 2021 IPO

INDIA – Indian Food Tech Unicorn, Zomato is in the process of raising US$146 million in series J funding even as it prepares for a landmark Initial Public Offering slated for early next year.

The Gurugram-based startup has so far raised an additional ₹37.9 crore (about $5.1 million) from Pacific Horizon Investment Trust, which is managed by UK’s Baillie Gifford and Co. Ltd.

Pacific Horizon Investment Trust had previously invested $5 million in the Indian food tech company.

According to a report by Deal Street Asia, the ongoing seed round will see Mirae Asset-Naver Asia Growth Fund, Steadview Capital, hedge-fund Luxor Capital Partners, Lugard Road Capital and ASP India LP inject fresh capital into Zomato over the coming weeks.

In a bid to bolster its cash reserves, Zomato has been on a fundraising spree over the past few months.

Mint reports that the food tech has raised a little more than US$270 million so far in 2020 from key investors such as Tiger Global Management, Temasek, through MacRitchie Investments, and Ant Financial.

In further preparation for its IPO,  Zomato recently appointed Kotak Mahindra Bank as a merchant banker and Cyril Amarchand Mangaldas and Indus Law as legal advisors for the initial public offering (IPO).

Zomato’s current valuation is US$3.3 billion, as per the last funding round in October, which saw Kora Investments pumping in close to US$52 million.

If successful in IPO launch, it will join the likes of MakeMyTrip and Info Edge India Ltd- Zomato’s single-largest shareholder – in launching IPOs.

MakeMyTrip listed on the Nasdaq in 2010, and while Edge India Ltd debuts its IPO in 2006 successfully listing its shares in BSE.

In October, Zomato had made changes to its leadership team, elevating Akshant Goyal as the chief financial officer (CFO), as it continued to give its employees exits through secondary share sale transactions.

Akriti Chopra, the former CFO who was responsible for fundraising, will now oversee people development programmes.

Even as the Indian tech startup plans to go public, losses are still a major issue rising from US$277 million in 2019 to US$293 million in 2020.

Analysts interviewed by Mint are however confident that the losses would not impact Zomato’s IPO aspirations.

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