The food tech company, which has reportedly been in and out of the coveted 'unicorn', or the billion dollar company club, due to different market estimations, planned to raise $200 million by April last year from its old and new set of investors.
According to sources, China's web services giant Baidu was supposed to be a lead investor in Zomato's fresh funding round. It was also touted to be Baidu's first investment in India.
There were again rumours of talks with Tiger Global late last year but sources close to the company said that the talks fell through. Zomato had raised $60 million from Singapore's Temasek and Vy Capital in September 2015. The round had put the company's value at about $960 million.
"Zomato has been doing well but now it needs the money for the next level of expansion. Foodpanda, after being on the block in 2015, has not only managed to revive but has managed to raise more than $450 million, which might be all the money it needs for expansion and profitability. Now, Zomato needs to up its game," said a source close to the company.
In May this year, Delivery Hero, which owns online food delivery platform Foodpanda, invested a part of the $431.45 million (around Rs 3,000 crore) it raised from South African internet investor Naspers in its India operations.
In December last year, Foodpanda was merged by its investor Rocket Internet with Delivery Hero, a German online food delivery platform, after the Indian operations reported losses.
Ever since then, Foodpanda has been beefing up its technology and delivery and has gained a lot of the ground it lost to rivals such as Swiggy and Zomato.
Started in 2008, Zomato has been able to cut down on its losses by as much as 34 per cent in its total loss for 2016-17. Its total losses for 2016-17 stood at Rs 389 crore, down from Rs 590 crore in the previous year, according to the annual report of its largest shareholder Info Edge. Its revenue also saw a spike of 81 per cent year-on-year to Rs 333 crore from Rs 184 crore, according to the annual report of its largest shareholder Info Edge.
Sources said that the company hopes that this would help it raise funds and bring in a major backer such as Alibaba.