India: Food ordering platform Zomato raises $210m from Alipay

Zomato turns 3 party in Beirut. Photo: Zomato

Restaurant discovery and food-delivery platform Zomato has signed a definitive agreement to raise about $210 million from its existing shareholder Alipay Singapore Holding Pte. Ltd., the digital payments arm of Chinese e-commerce giant Alibaba.

Upon closing of the transaction, parent company Info Edge’s shareholding in Zomato will stand reduced to about 27.68 per cent on a fully converted and diluted basis from 30.91 per cent currently, the Indian online classifieds company said in a BSE filing on Friday.

The development comes almost eight months after Zomato raised $200 million in a funding round led by Ant Financial in February this year. That round saw Ant Financial buy Zomato shares in primary and secondary transactions, while Info Edge sold its shares bringing its shareholding down to 30.91 per cent from 44.74 per cent then.

Zomato had then attained a post-money valuation of $1.1 billion and entered the unicorn club, a moniker used for privately held startups that are valued at $1 billion or more.

In September, Ant Financial had reportedly secured rights to become the largest shareholder in the company replacing Indian online classifieds company Info Edge. At present, Ant Financial holds about 20-22 per cent stake in Zomato.

Till February, Zomato had raised a total of $443.8 million across 10 round of funding rounds since inception, according to Crunchbase data.

The company raised $20 million from existing investors Sequoia Capital, Vy Capital, Info Edge, along with two new investors, including WhatsApp’s Neeraj Arora in April last year. It raised $60 million from Singapore’s Temasek Holdings and Vy Capital. Venture capital firm Sequoia Capital became an investor in Zomato in September 2015.

The unicorn startup has acquired 12 companies till date. Its last acquisition was that of Bengaluru-based TongueStun Food for about $18 million in September.

Food technology startups in India made a comeback this year as investors started to look at this space again. The segment has also seen the entry of new players in the last couple of months including Ola-Foodpanda, UberEats and Google Areo. According to data from startup tracker Tracxn, the foodtech space saw investments worth $370 million in the fiscal year 2017-18 up from $70 million in 2016-17, noted a The Times of India report in March.

Swiggy, the largest player in the country’s food delivery space, raised $210 million in fresh funding from new and existing investors led by South African media company Naspers Ltd and DST Global in June this year. The company is reportedly in talks to raise an additional $700 million from new investors such as Tencent Holdings Ltd to enter new businesses.