Online food discovery and delivery platform Zomato has raised $250 million from Tiger Global, Kora Capital and existing investor Temasek, which is Singapore’s state investment arm in an ongoing funding round. With this funding, Zomato has inducted two new investors: American hedge fund Tiger Global and US-based Kora Capital. This funding pegs the valuation of the company at around $3 billion.
As per a Livemint report, Temasek has invested around $62 million (Rs 456 crore) in Zomato and has reportedly allocated 15,188 shares to MacRitchie Investments, a unit of Temasek, at a share premium of nearly Rs 293,535.
Sources told Economic Times (ET) that Tiger is likely to invest another $100 million if Zomato is able to get back to its pre-COVID business volumes.
A person who is aware of the developments told ET that the funds from Temasek and Tiger are in, and Kora’s money is expected in about a week. For Kora, the Zomato deal, if it goes through, represents its first bet on an Indian internet firm.
Kora had invested $125 million in financial services conglomerate Edelweiss last year, denoting its first foray into India.
The new round of financing for Zomato comes amid uncertainty over the India strategy of its most important backer, China’s Ant Financial. Ant, which is Alibbaba’s sister company, holds 25% stake in Zomato and had pledged to invest $150 million in January. However, only $50 million of the promised amount has come Zomato’s way till now.
The uncertainly around Chinese investments stems from anti-China sentiment prevalent in India in the wake of the border tensions between the two nations.
Further, India’s new FDI rules formulated in April mandate regulatory approval for any investment from a country that shares a land border with the country.
Meanwhile, Zomato refused to comment on the fundraising development.
Taking about the business prospects, the Zomato spokesperson added that due to improved unit economics over the past 12 months, and the strong recovery of food delivery business (at 80% of pre-COVID levels), the company was evaluating if going public would make sense for its business in the near future.
While reports state that the current round values Zomato at $3 billion, HSBC Global Research recently valued the food delivery platform at $5 billion and said that the pandemic accelerated Zomato's path to profitability, with there being lesser discounts.