Zomato to Raise Funds from $500 Mn to $1 Bn This Year
Zomato, being one of the most established and reputed Indian restaurant discovery platform has decided to raise its funds from $500 Mn to $1 Bn from Chinese private equity major Primavera Capital and Alibaba payments affiliate Ant Financial, along with other investors.
One of the media reports revealed that the Primavera may invest around $200 Mn (INR 1392.5 Cr) in the upcoming round while the remaining amount could come from existing backer Ant Financial.
A representative from Zomato stated, “There is a new round that we are talking to potential investors (including Ant Financial) for our new fundraise. This will be at a premium to the last round as the company has more than doubled in size since the last round was finalised.”
The Zomato Insights
Presently, Zomato has been coming up with a few products which allow the customers to pick up their products from restaurants. This has been initiated by Zomato recently across thirteen cities accompanied by loyalty rewards called Piggybank.
Apart from this, Zomato also acquired TongueStun Food, a Bengaluru-based startup which aggregates caterers and restaurants for office canteens besides picking up a stake in Loyal Hospitality to expand its cloud kitchen operations in Bengaluru.
The Zomato-Swiggy Race
Zomato being a rival to Swiggy has been in the talks for a few days in the news and it has been ascertained that Zomato is likely to dominate Swiggy as it opted for fresh funding in the year 2018. Nevertheless, Swiggy also raised its stakes to $1 Bn in December 2018 led by South African tech investor Naspers.
One of the reports stated “Zomato had not anticipated Swiggy to raise $1 Bn, it was more on the lines of $600 Mn in primary money that they thought would come into the firm. This has made them recalibrate their new financing so that they can continue to fight Swiggy.”
But later, in the year 2018, Zomato raised its funds to $200 Mn (INR 1392.5 Cr) led by Ant Financial in February 2018 and $210 Mn (INR 1462 Cr) from Alibaba’s digital payments subsidiary Alipay in October 2018. With $1Bn in annual gross merchandise value, the decade-old company recorded a 40% growth in its revenue for the financial year 2018 and targeted expansion in its business operations to around 100 cities across India.
Deepinder Goyal, the CEO of Zomato expressed, “At the beginning of 2018, we were at 3.5 million orders a month. With 21 million orders per month, as far as we know, we are now the market leader in the food ordering space in India.”
Zomato’s Current Stand in the Market
Zomato achieved 21 Mn monthly delivery orders and 2.4 Mn users last year. But it is indeed disheartening to know that it was in the headlines last year for a wrong reason when a video of one of its delivery executives on a bike eating out of food packets meant for delivery went viral. The company tried its best to control the social media furor and announced plans to launch tamper-proof tapes on its food boxes and also fired the delivery person responsible for such as act.
Having achieved an online delivery market worth 19 Bn at present, Zomato’s recent adjudicature to raise funds has proven that it will not back down from Swiggy’s challenge.
Moreover, the emerging food delivery agencies like UberEATS and Foodpanda have also come up with compelling plans to make their presence felt in the rapidly-growing food delivery market today. So, this shows that the competition among the food delivery markets is definitely going to be provocative. So, let’s watch out!