The infusion is expected to help Zomato
compete with Tencent-backed Swiggy and e-commerce giant Amazon, which recently forayed into food delivery.
This infusion comes at a time after it was reported by the media that Zomato, valued at around $3.5 billion, was facing hurdles to raise $150 million funding from its biggest Chinese investor Ant Financial, an affiliate of e-commerce giant Alibaba. According to reports, this happened because the Centre changed foreign direct investment norms and introduced a pre-clearance mechanism on investments from China.
In January, Info Edge India, which is also an existing shareholder in Zomato
said that the firm had signed a definitive agreement to undertake a primary fundraise of up to $150 million from Antfin Singapore Holdings and its affiliates. Info Edge had said in an exchange filing the transaction valued Zomato at a pre-money valuation of $3 billion.
In the same month, ride-hailing firm Uber announced that it had sold the India business of Uber Eats to Zomato for a 9.99 per cent stake in the Gurugram-based company. Uber sold its Indian food delivery
business to Zomato for $206 million.
In April, the firm raised close to $5 million from Pacific Horizon Investment Trust, a fund managed by British investment management firm Baillie Gifford.
However, in May, Zomato said it would let go of 13 per cent of its staff, affecting close to 520 employees, as a result of the extended lockdown and restaurants shutting shop due to the Covid-19 pandemic. According to sources, the total number of employees at Zomato at the time was about 4,000.
In July, Zomato said its revenue for the financial year 2020 (FY20) grew 105 per cent to $394 million, while loss rose about 6 per cent to $293 million. In its annual report, Zomato said Covid-19 had accelerated the company's journey to profitability, in spite of initial hiccups.
According to the report ‘State of the Restaurant Industry in India’ released by Zomato this month, the food delivery industry has largely recovered, with the sector clocking around 75-80 per cent of pre-Covid gross merchandise value (GMV) .
In the report, Zomato said it has delivered 70 million food orders since lockdown started on March 25. It estimates that between other food aggregators and direct restaurant channels, Indians have ordered 200 million times since the lockdown. It said there have been zero reported cases of Covid-19 transmission due to food delivery.
The number of restaurants offering food delivery are at 70 per cent of pre-Covid levels. Out of this, about 5 per cent restaurants did not offer food delivery services in the pre-Covid-19 times. Most of these are dining-out centric places which have shown agility to pivot to food delivery.
The report said that the recovery trends are strong and Zomato estimates the industry to hit pre-Covid-19 levels of business in the next two-three months.