BENGALURU: The big bet of global investors on India’s fast-growing foodtech ecosystem continue, with Zomato, one of the leading restaurant aggregators in the country, securing $150 million funding from its existing investor Ant Financial, an Alibaba affiliate, at a valuation of $3 billion.
“This is to inform you that Zomato Media Pvt Ltd has signed a definitive agreement to undertake a primary fundraise of up to $150 million from Antfin Singapore Holding Pte Ltd, and upon closing, as a consequence of this fund-raise, our shareholding in Zomato shall stand reduced to about 25.13 per cent on fully converted and diluted basis. The transaction values Zomato at a pre-money valuation of $3 billion,” Zomato’s top shareholder Info Edge (India) said in an exchange filing on Friday.
Ant Financial had acquired 14.7 per cent stake in Zomato for $210 million in 2018 and later increased its stake to 23 per cent.
Reports suggest that this is the first tranche received by Zomato after holding advanced talks for the last two months on raising $600 million from Ant Financial and Singapore-headquartered Temasek.
In December 2019, Zomato founder Deepinder Goyal had said that the company would raise $500-600 million in the next six months to fuel its ambitions on food delivery, dining out and sustainability.
According to experts, the fresh funding will also help Zomato improve its competitive standing against rival Swiggy, the other big player in the segment. Swiggy, which recently increased prices of its ‘Super’ membership to cut down losses, is reportedly in talks with global investors to raise $500 million at a valuation of approximately $4 billion.
The Ant Financial investment also comes at a time when there are speculations that Zomato may consolidate its position by acquiring the loss-making UberEats. Reports suggest that online cab aggregator Uber may invest $100-200 million in Zomato.
The high-stake funding in India’s foodtech ecosystem comes even as Zomato and Swiggy reported mammoth rise in their new losses.
Zomato’s revenue rose to Rs 1,397 crore for the financial year 2018-19 against Rs 485 crore in the previous financial year, but its loss widened to Rs 1,001 crore in financial year 2018-19 from Rs 106 crore in financial year 2017-18. Similarly, Swiggy’s net loss increased to Rs 2,367 crore in financial year 2018-19 against Rs 397 crore loss reported for financial year 2017-18.