Ant Financial, the financial services affiliate of China-headquartered e-commerce firm Alibaba, has agreed to invest $200m in India-based restaurant listings and reviews platform Zomato at a $1.1bn valuation, LiveMint reported yesterday.
Info Edge, the online classified listings company that was Zomato’s majority investor as recently as 2015, is selling $50m of shares to Ant Financial as part of the round and will own a 30.9% stake once the deal closes, according to a stock exchange filing.
Zomato operates an online listings platform for restaurants that includes menus and reviews from its users. It covers a total of more than a million restaurants spanning some 10,000 cities across 24 countries in six continents.
The company has now raised $375m in total, not including the $50m secondary portion of the latest round. Info Edge has been an investor in Zomato since 2010 and held a 50.1% stake as of its $50m series F round in 2015.
Zomato’s other backers include investment firm Vy Capital, venture capital firm Sequoia Capital and the Singaporean state-owned Temasek.
Ant Financial made the investment as part of a wider strategy to increase its presence in Southeast Asia, India, Australia and New Zealand, all of which are among the most popular holiday destinations for Chinese tourists, according to LiveMint.
The Zomato investment was disclosed alongside news that Alibaba will take a 33% stake in Ant Financial, which it spun off in 2011. It was reportedly valued at $60bn as of February 2017.
The deal, agreed as early as 2014, will involve Alibaba giving up its intellectual property rights related to Ant and its royalty payments from the company rather than it making a financial investment, according to the Financial Times.
The share of Ant Financial held by Alibaba employees will fall from 76.4% to 51.2% while external investors will see their joint stake diluted from 24.6% to 15.8%.
Ant Financial had received between $5bn and $6.2bn from postal service China Post, China Development Bank, National Council for Social Security Fund and undisclosed insurance companies in 2015.
The company raised a further $4.5bn from investors including China Post, insurance firms including China Life, China Investment Corp, Primavera Capital Group, China Development Bank Capital and CCB Trust, a subsidiary of China Construction Bank.