INDIA – Indian food delivery startup Zomato has raised US$250 million, two months after closing a US$660 million Series J financing round, reinforcing the strong confidence investors have in Zomato, which struggled to raise money for much of last year.
Kora, Fidelity, Tiger Global, Bow Wave, and Dragoneer, pumped the new capital into the 12-year-old Gurgaon-headquartered startup, Info Edge, a publicly listed investor in Zomato, disclosed in a filing to a local stock exchange.
Zomato, which acquired the Indian food delivery business of Uber early last year, competes with Prosus Ventures-backed Swiggy (valued at about US$3.6 billion) in India.
Together they work with over 440,000 delivery partners, a larger workforce than that employed by Indian Department of Posts.
With the new funding, the company has achieved a valuation of more than US$5.4 billion, making it nearly US$2 billion more valuable than Swiggy.
Such an immense war chest is necessary particularly at time like now when the startup is preparing for an Initial Public Offering scheduled for later this year.
At stake is India’s food delivery market, which analysts at Bernstein expect to be worth US$12 billion by 2022.
Zomato which has about 50% of the market share will have to defend its tuff from competitors such Swiggy and Amazon – which entered the food delivery market in India last year.
Re-evalution of office catering business
The food delivery start up is in the process of evaluating its office catering business given that the pandemic has forced most employees to stay away from work.
Zomato had acquired Bengaluru-based online caterer and office canteen aggregator Tonguestun Food in 2018 for an estimated US$18 million to foray into the space.
Designed to deliver food to employees at work, the office catering business quickly fell out of fashion once the pandemic took hold in India and many workers were forced to work from home.
Demand has plummeted to record lows, forcing the company to re-valuate the viability of the office catering business.
“With most corporates looking at WFH as a permanent way of functioning, we have evolved our food@work services to cater to the new normal,” a Zomato spokesperson said,
“We already have more than 100 corporates on board and are catering to over three lakh employees, right in the safety of their own homes,” she added.
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