India-based online restaurants portal Zomato is seeking up to $1bn in a round that will probably be led by e-commerce firm Alibaba’s financial services affiliate, Ant Financial, TechCircle reported today.
A person familiar with the matter said: “Zomato would be able to raise up to $1bn and the valuation is likely to touch $3bn post the funding round,” adding that the corporate will likely be joined by undisclosed new investors.
The news comes after three sources familiar with the development told the Economic Times on Tuesday that Zomato was in talks with Ant Financial and investment firm Primavera Capital over a round sized between $500m and $1bn.
Zomato runs an online listings and reviews platform spanning some 10,000 cities across 24 countries, and has entered the online food delivery space by supplying restaurants with online ordering capability along with table management tools.
The company, which had 21 million monthly active users as of October 2018, last raised funding when Ant Financial invested $210m to buy primary and secondary shares the same month.
Reports the month before suggested travel agency Ctrip would also take part, in a round that could reach $400m, valuing Zomato at between $1.8bn and $2bn.
Ant Financial had already provided $150m of equity funding for the company in March 2018 while buying another $50m of shares from classified listings operator Info Edge at a reported $1.1bn valuation.
Info Edge, an investor on Zomato since 2010, held a 50.1% stake as recently as 2015 but the latest round cut that share to 27.7%. The company’s earlier investors also include investment firm Vy Capital, venture capital firm Sequoia Capital and the Singaporean state-owned Temasek.
A separate source told TechCircle that telecommunications group SoftBank, which had reportedly entered talks in May 2018 to invest in Zomato, has instead switched focus to its largest rival in the domestic food delivery sector, Swiggy.
Swiggy raised $1bn last month in a round featuring Meituan Dianping, the local services platform that counts SoftBank as a key investor, and it was Meituan Dianping’s participation that has proven a key factor.
An investor with knowledge of Swiggy’s December round told TechCircle: “The founders (of Swiggy) met with [SoftBank CEO Masayoshi Son] a couple of months ago. Since the last funding round had nearly closed, they decided not to participate at the time but have kept their options open on a new round in the near future.”
