Adding to the pile of capital it had already raised this year, Zomato has announced the closing of a $660 Mn round with 10 new investors joining the company’s cap table. Cofounder and CEO Deepinder Goyal announced on Twitter that Tiger Global, Kora Capital, Luxor, Fidelity (FMR), D1 Capital, Baillie Gifford, Mirae, and Steadview are among the new investors, many of whom had already been announced as investors in the company in past months. Zomato has raised the round at a post-money valuation of $3.9 Bn.
Beyond the fundraise, the CEO also said the company is in the process of closing another $140 Mn secondary transaction for further funding. “As part of this transaction, we have already provided liquidity worth $30 Mn to our ex-employees,” Zomato’s chief added.
As per rounds announced earlier, Zomato secured $50 Mn from Kora Management LP, $60 Mn from Luxor Capital Group and $40 Mn from Mirae Asset, along with $20 Mn each from Steadview Capital and Bow Wave Capital Management, and $5 Mn from Baillie Gifford & Co. In September, the company had raised $102.5 Mn from US-based investment firm Tiger Global Management after raising $62 Mn from Singapore-based state investment arm Temasek through MacRitchie Investments, which has recently invested $375 Mn in Zomato backer Info Edge’s IEVF fund.
In his tweets, Goyal said that the food delivery business in India is coming out of “Covid-19 shadows”. He added that December 2020 is expected to be the highest ever GMV month for Zomato and this is 25% higher than what the company recorded in February 2020, before the pandemic.
Speaking about the liquidity for ex-employees besides the funding, Goyal added, “I am grateful for their contribution in building Zomato and am glad that we created some wealth for these super amazing people. A number of these ex-zomans are busy working on their own startups and will not need to raise seed capital from external investors.”
As reported exclusively by Inc42 this week, Zomato is currently in the midst of testing a new payout system, which ensures a payment of INR 4,000-5,000 a week for its delivery partners, which would definitely change the overall costs structure for the delivery business. The fresh funding would definitely go a long way towards easing these overheads. The new model is currently being tested on a pilot basis in Delhi. The minimum payout to delivery executives is made to their bank accounts when they meet a target of 60-65 hours a week. The new compensation model also provides a monthly compensation of INR 26-28K a month which is higher than the market norms, according to sources close to the development.