Food delivery startup Zomato has raised $150 million in funding from Chinese giant Alibaba’s Ant Financial. According to an Economic Times report, this investment values Zomato at $3 billion. This is also part of a fund-raising effort that will see Zomato receiving a total of $500 million. These funds could come in over the next couple of months.
Ant Financial has been one of the early investors in Zomato and before this $150 million investment, held 23% stake in the company. This figure will be reworked now.
Zomato is also reportedly involved in serious discussions with Uber which envisage the takeover of Uber Eats by Zomato and Uber making an investment in the food delivery company. It is said the deal is worth an overall $300 million but the full details are yet to emerge. A clearer picture may emerge once both sides reach an agreement over the terms of the deal.
Zomato has been having an ongoing duel with Swiggy for market share in the food order delivery business. Zomato, though ranked second to Swiggy in the Indian context, had spread its operations beyond borders and was functioning in the UAE as well. Last year, however, the company decided to sell the UAE arm to Delivery Hero, a company based out of Berlin, Germany. The deal was worth $172 million. At that juncture, Zomato was valued at $2 billion.
In terms of the financial figures, Zomato posted a revenue of Rs 1,397 crore for the financial year 2018-19 and the losses were Rs 1,001 crore. Losses have proportionately come down after the company cut down on the monthly burns from around $45 million to around $20 million. These are sums spent by the company towards promotions and marketing by offering discounts to the customers who place their food orders online on its platform.