Your browser is currently blocking notification.
Please follow this instruction to subscribe:
X
Notifications are already enabled.
X

Zomato May Raise $550 Mn Funding Round To Venture Beyond Food Delivery

Zomato May Raise $550 Mn Funding Round To Venture Beyond Food Delivery

The company has raised $759.6 Mn till date

Zomato is also reportedly looking to mirror Swiggy Go, a hyperlocal delivery service of its arch-rival Swiggy

Last month, reports surfaced that Zomato is finalising a $600 Mn funding round

Gurugram-based foodtech unicorn Zomato is said to be in talks to raise a fresh funding round of $550 Mn. A Techcrunch report said that Zomato may raise this round led by Ant Financial, based on information obtained from unnamed sources.

The report added that Zomato is also working on setting up a supply chain operation to control the raw material its restaurant partners use. It further said that Zomato is looking to mirror Swiggy Go, a hyperlocal delivery service of its arch-rival Swiggy.

Prior to this, in October, unconfirmed reports surfaced that Zomato is finalising a $600 Mn funding round led by Ant Financial. The round is speculated to see participation from Temasek as well as other existing investors. The report said that few hedge funds may invest about $150 Mn-$200 Mn as well.

The latest report speculated that the company may be valued at $3 Bn, a major jump over the company’s last valuation of $2 Bn in the funding round this year.

It is to be noted that Zomato has raised $759.6 Mn till date from investors such as Ant Financial, Delivery Hero, Info Edge etc. Founded in 2008 by Deepinder Goyal and Pankaj Chaddah, Zomato claims to have over 70 Mn monthly active users. It further claims to have over 1.4 Mn premium Gold subscribers.

The company claims to enable food delivery across more than 500 cities and claims to enable 1.3 Mn orders a day. In the H1FY20, the food aggregator and delivery startup has around 119K restaurants, compared to 43K last year.

On a consolidated basis, the total income of Zomato is INR 1397 Cr, with expenses of INR 3598 Cr leading to a loss of INR 1001.15 Cr for the year ending March 31, 2019.  On a standalone basis, Zomato reported total revenue of INR 1350.47 Cr and expenses of INR 3109 Cr leading to losses of INR 570.52 Cr for the same period.

For H1 FY20, the company has also pointed out that its monthly burn rate, which measures the rate at which a company is losing money, is down by 60%.In August 2019, during the #logout campaign, the restaurants listed on the food aggregator had called out Zomato for eating into their margins through Gold and Infinity Dining feature, which provided heavy discounts.

The restaurant association has highlighted issues such as “unreasonably high commissions, payment terms and arbitrarily applied additional charges” that restaurants have been charged to be a part of Zomato Gold.

After #logout campaign, discontinuing infinity dining service, altering rules and extending the benefits of Zomato Gold, and multiple rounds of layoffs, the company witnessed protests from delivery partners.

The controversial Zomato Gold service has registered a 180% increase with 1.4 Mn users. With an eventful FY20, Zomato’s rival Swiggy has also been out on the block seeking fresh funds.