Zomato In Talks For New $1 Bn Fundraise To Counter Swiggy’s Latest Funding

Zomato In Talks For New $1 Bn Fundraise To Counter Swiggy’s Latest Funding

SUMMARY

Zomato raised $410 Mn in 2018

The latest funding round will reportedly be at a premium to the last round

Swiggy raised $1 Bn in December 2018 in a round led by Naspers

Gurugram-based foodtech company Zomato is reportedly in talks to raise a fresh funding round of $500 Mn to $1 Bn from Chinese private equity major Primavera Capital and Alibaba payments affiliate Ant Financial, along with other investors.

A media report citing sources familiar with the development said that the Primavera may invest about $200 Mn (INR 1392.5 Cr) in the upcoming round while the remaining amount could come from existing backer Ant Financial.

A Zomato representative reportedly said, “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.”

Zomato, which is caught in a two-horse race with rival Swiggy to dominate the online food and restaurant business, has been in talks with major investors for fresh funding in 2018. However, Swiggy raised the stakes when it raised a $1 Bn funding in December 2018 led by South African tech investor Naspers.

“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,” the report added.

In 2018, Zomato raised two tranches: $200 Mn (INR 1392.5 Cr) led by Ant Financial in February and $210 Mn (INR 1462 Cr) from Alibaba’s digital payments subsidiary Alipay in October. With $1Bn in annual gross merchandise value, the decade-old company recorded a 40% growth in its revenue for FY18 and targeted expansion to 100 cities across India.

Zomato also achieved 21 Mn monthly delivery orders and 2.4 Mn users last year. However, it grabbed the headlines for the wrong reason last year when a video of one of its delivery executives on a bike eating out of food packets meant for delivery went viral. The company did its best to control the social media uproar, announced plans to launch tamper-proof tapes on its food boxes, and fired the delivery person.

With the online food delivery market estimated to be worth $19 Bn at present, Zomato’s newfound urgency to raise funds has shown that it will not back down from Swiggy’s challenge. Meanwhile, emerging food delivery players like UberEATS and Foodpanda have also drawn up plans to make their presence felt in the rapidly-growing food delivery market.

[The development was reported by ET.]

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Zomato In Talks For New $1 Bn Fundraise To Counter Swiggy’s Latest Funding-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Zomato In Talks For New $1 Bn Fundraise To Counter Swiggy’s Latest Funding-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Zomato In Talks For New $1 Bn Fundraise To Counter Swiggy’s Latest Funding-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Zomato In Talks For New $1 Bn Fundraise To Counter Swiggy’s Latest Funding-Inc42 Media
Zomato In Talks For New $1 Bn Fundraise To Counter Swiggy’s Latest Funding-Inc42 Media
You’re in Good company