Zomato will raise $150 million from Ant Financial, an Alibaba affiliate, as the foodtech startup vies with peers Swiggy and UberEats for a bigger share of India's food delivery market.
The transaction values Zomato at a pre-money valuation of $3 billion, a person aware of the company's plan told BloombergQuint. The capital is part of a $500-million fundraising that's likely to close in the next two months, the person said on the condition of anonymity as the details are not public yet.
To be sure, Zomato confirmed that the $150 million is part of a larger funding round but declined to divulge more details. The company, in a statement, said Ant Financial—also an existing investor of Zomato—has been a steadfast partner in its journey towards achieving market leadership in on-demand food delivery in India.
Zomato's top shareholder Info Edge (India) Ltd., in an exchange filing, said after the funding its stake will drop to 25.13 percent from 26.38 percent as of March last year.
The fund infusion, the first for a foodtech platform this year, also comes when Zomato is in talks to acquire Uber Technologies Inc.'s India foodtech business, UberEats, according to the person quoted above, as it struggles to fend off the competition.
Tencent-backed Swiggy, which counts Prosus, DST Global, China's Meituan-Dianping, among others as investors, is the most-funded food tech platform in India—the meal delivery market of which according to Redseer is expected to nearly quadruple to $2.5 billion by 2021.
The market generated $7.7 billion in annual revenue in 2019, according to Statista. And Swiggy and Zomato, which together raised $2 billion from investors last year, dominate the market.
In 2018-19, Zomato posted a revenue of Rs 1,397 crore on a loss of Rs 1,001 crore, according to filings made with the Registrar of Companies.
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