Zomato has raised $250 million, two months after closing a $660 million Series J financing spherical, because the Indian meals supply startup builds a war-chest forward of its IPO later this yr.
Kora (which contributed $115 million), Fidelity ($55 million), Tiger Global ($50 million), Bow Wave ($20 million) and Dragoneer ($10 million) pumped the new capital into the 12-year-old Gurgaon-headquartered startup, Info Edge, a publicly listed investor in Zomato, disclosed in a submitting (PDF) to an area inventory change. The new investment provides Zomato a post-money valuation of $5.4 billion, up from $3.9 billion in December final yr, mentioned Info Edge, which owns 18.4% stake in the Indian startup.
The new investment reinforces the sturdy confidence traders have in Zomato, which struggled to lift cash for a lot of final yr. Zomato, which acquired the Indian meals supply enterprise of Uber early final yr, competes with Prosus Ventures-backed Swiggy (valued at about $3.6 billion) in India. Together they work with over 440,000 supply companions, a bigger workforce than that employed by Indian Department of Posts.
A 3rd participant, Amazon, additionally entered the meals supply market in India final yr, although its operations are nonetheless restricted to components of Bangalore.
At stake is India’s meals supply market, which analysts at Bernstein anticipate to balloon to be value $12 billion by 2022, they wrote in a report back to purchasers. With about 50% of the market share, Zomato is the present chief among the many three, Bernstein analysts wrote.
“We find the food-tech industry in India to be well positioned to sustained growth with improving unit economics. Take-rates are one of the highest in India at 20-25% and consumer traction is increasing. Market is largely a duopoly between Zomato and Swiggy with 80%+ share,” wrote analysts at Bank of America in a current report, reviewed by TechCrunch.
Zomato and Swiggy have improved their funds in current years, which is particularly spectacular as a result of making a living with meals supply may be very typically tougher in India. Unlike Western markets such because the U.S., the place the worth of every supply merchandise is about $33, in India, the same merchandise carries the value tag of $3 to $4, in keeping with analysis corporations.
Both the startups eradicated a whole lot of jobs final yr because the coronavirus pandemic hit their companies. Zomato co-founder and chief government Deepinder Goyal mentioned in December that the meals supply market was “rapidly coming out of COVID-19 shadows.”
“December 2020 is expected to be the highest ever GMV month in our history. We are now clocking ~25% higher GMV than our previous peaks in February 2020. I am supremely excited about what lies ahead and the impact that we will create for our customers, delivery partners and restaurant partners,” he mentioned.
In an e mail to workers in September final yr, Goyal mentioned Zomato was engaged on its IPO for “sometime in the first half” of 2021 and was elevating cash to construct a war-chest for “future M&A, and fighting off any mischief or price wars from our competition in various areas of our business.”