Zomato Raised $ 250 Million, Two Months After Closing $ 660 Million Series J Funding Round, As Indian Food Delivery Startup Builds War Chest Before Its IPO later this year.
Kora (who contributed $ 115 million), Fidelity ($ 55 million), Tiger Global ($ 50 million), Bow Wave ($ 20 million) and Dragoneer ($ 10 million) injected the new capital into 12-year-old Gurgaon-based start-up Info Edge, a publicly traded investor in Zomato, has been disclosed in a file (PDF) to a local exchange. The new investment gives Zomato a post-silver valuation of $ 5.4 billion, up from $ 3.9 billion in December last year, said Info Edge, which owns an 18.4% stake in the Indian startup.
The new investment bolsters strong investor confidence in Zomato, which has struggled to raise funds for much of the past year. Zomato, which acquired the Indian food delivery business from Uber early last year, competes with Swiggy, backed by Prosus Ventures (valued at around $ 3.6 billion) in India. Together, they work with more than 440,000 implementing partners, a larger workforce than that employed by India’s Post Office.
A third player, Amazon, also entered the food delivery market in India last year, although its operations are still limited to parts of Bangalore.
At stake is the Indian food delivery market, which Bernstein analysts expect to reach $ 12 billion in value by 2022, they wrote in a report to customers. With around 50% of the market share, Zomato is currently the leader among the three, Bernstein analysts wrote.
“We find that the food technology industry in India is well positioned for sustained growth with an improving unity economy. Participation rates are one of the highest in India at 20-25% and consumer traction is increasing. The market is largely a duopoly between Zomato and Swiggy with an 80% + share, ”Bank of America analysts wrote in a recent report, reviewed by TechCrunch.
Zomato and Swiggy have improved their finances in recent years, which is particularly impressive as making money from food delivery is very often more difficult in India. Unlike western markets such as the United States, where the value of each delivery item is around $ 33, in India a similar item is priced at $ 3 to $ 4, according to research companies.
The two startups cut hundreds of jobs last year as the coronavirus pandemic hit their businesses. Zomato co-founder and chief executive Deepinder Goyal said in December that the food delivery market “is rapidly emerging from the shadows of COVID-19.”
“December 2020 is expected to be the highest GMV month in our history. We are now experiencing ~ 25% higher GMV than our previous highs in February 2020. I am extremely excited about what lies ahead and the impact we will create for our customers, delivery partners and catering partners, ”a he declared.
In an email to employees in September last year, Goyal said Zomato was working on its IPO for “a while in the first half” of 2021 and was raising money to build a war chest. for “future mergers and acquisitions, and to fight any mischief or price.” wars of our competitors in various areas of our business. “