Food delivery and discovery giant Zomato has raised an additional ₹1,550 crores ($210 million) in from Alibaba‘s payment arm Ant Financial, as the startup aggressively competes with Swiggy for greater market share.
Disclosing in its stock filing Info Edge said, “We would like to bring to your knowledge that Zomato has signed a definitive agreement to undertake a primary fundraise of approximately USD 210 million from Alipay Singapore (Ant Financial)”.
According to the filings, Info Edge’s ownership in Alibaba backed Zomato will drop from 30.91% to 27.68%, owing to the fresh infusion of funds from Alipay Singapore or the affiliates of Ant Financial.
The fresh funding is expected to further push Zomato’s valuation from $1.1 billion to around $2 billion, taking Ant Financial’s stake in the startup to a little over 10%, according to reports.
The news comes soon after it was reported that Zomato was in talks to raise around $400 million, with a valuation of $2 billion, last month.
Earlier this year in February 2018, Zomato had raised $200 million from Ant Financial in fresh funding.
Last month, it was reported that Ant Financial had secured the rights to become the largest stakeholder in foodtech startup Zomato. With the latest infusion, Ant Financial is expected to become the largest stakeholder in Zomato, moving past Info Edge, whose stake will drop to 27.68%, post-investment.
In August 2018, it was also reported that Zomato’s food delivery rival Swiggy is in talks with existing and new investors to raise $500 million, further heating up the battle between the two foodtech giants.
Amidst the fierce competition and growing expenses, owing to expansion, in order to expand coverage and reach a greater number of customers, Zomato has continued on a growth trajectory, registering a 40% growth in revenue, at the same time cutting losses by 73% for FY18.
In a blog post, Zomato had claimed that it achieved a monthly run rate of 21 million orders per month, during the month of September, edging it past Swiggy, to become the market leader.
Zomato continues its aggressive growth and expansion plans, by acquiring online corporate catering startup Tonguestun and expanding its delivery network by launching food delivery service across seven tier 2 cities.