Gurugram-based food-tech company Zomato is in early talks with investors to raise US$600 million in a funding round led by Chinese e-commerce giant Alibaba’s affiliate, Ant Financial, according to Economic Times, which quoted two sources aware of the development.
Ant Financial first came in as an investor in Zomato early last year, and according to regulatory filings, it raised its stake in the food delivery unicorn to 23% in November 2018. If this funding goes through, Zomato’s valuation could cross US$3 billion, and Ant Financial will seek a raise in its stake to 29%, making it the largest shareholder in Zomato, ahead of InfoEdge.
Founded in 2008, the restaurant aggregator has the backing of other heavyweight investors like Silicon Valley venture fund Sequoia Capital, Singapore Government’s Temasek Holdings, and Info Edge – its largest shareholder as of now.
In its performance figure for the first half of the fiscal year 2020, Zomato claimed an increase of about 225% in its half-yearly revenues, now touching US$205 million. Zomato has more than 1.4 million active restaurants on its platform and delivers about 40 million orders a month. The firm now claims to deliver food in 500 cities, which is up from 200 cities in April 2019. KrAsia couldn’t independently verify the abovementioned figures.
On the other hand, Bengaluru-based food delivery company Swiggy seems to be on course to breathing down Zomato’s neck. Sources told Economic Times that Swiggy is in discussions with new investors, including Korea Investment Partners, Mirae Asset Management, STIC Investments, and Neoplux to raise US$500 million.
Swiggy has the backing of South Africa-headquartered internet company Naspers, its largest investor that has 40% stake in the company, and it’s now gotten into grocery delivery as well.
Zomato and Swiggy were burning US$40 million to US$50 million each monthly earlier this year. However, both have trimmed the cash burn extensively on restaurant acquisition and customer discounts. Zomato now claims that it has slashed cash burn to 60% of what it was six months ago.
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Source: techinasia.com