Tech Startup News

Foodtech Zomato to boost $160million in funding from Tiger Global, MacRitch

One of the top-grossing Tech Startup News following this month was when the Foodtech major Zomato announced that they would be raising Rs 760 crore or $160 million in its Series J funding round from Tiger Global Management. This Tech Startup News has come after the corporate closed a $62 million fund from Temasek’s MacRitchie Investments.

“Zomato Pvt. Ltd has closed out on the deal to raise $100 million from Tiger Global Management, LLC (through its investment vehicle Internet Fund VI Pvt. Ltd and any of its affiliates), and $60 million from MacRitchie Investments Pvt. Ltd, an indirect wholly-owned subsidiary of Temasek’s Holdings,” Info Edge said during a regulatory filing.

To go into the detail of this Tech Startup News, Zomato Pvt. Ltd. has allotted 25,313 class J4 preferred stock to Tiger Global’s Internet Fund IV Pvt. Ltd at a problem price of Rs 3, 00,235 per share, regulatory filings sourced from Tofler showed.

Tech Startup News mentioned that this online food delivery segment will significantly grow in the coming years. As also, the last few years with Zomato and Swiggy competing head-on to grab market share,With this round of financing, Zomato’s valuation has jumped from $3.25 billion to an estimated $3.4 billion,as per various sources. Now it's touching almost at par with its rival competitor Swiggy, which was last valued at $3.6 billion.

Zomato aims to leap to the valuation of $3.4 billion to $3.25 billion. It will not just provide them an excellent investment to tap the market but also the needed funds to complete Zomato's biggest rival company- Swiggy. Swiggy has also raised $156 million in the March quarter of 2020 from Naspers.

As Zomato looks to draw in new investors to the corporate, these fundraising efforts could be it's last before it hits the general public markets. The company founder and CEO, Deepinder Goyal, said on an email to all its clients that it's also said that the corporate will look to travel public, by mid-next year, in 2021, consistent with two individual employees.

The fresh funds for the Gurugram-based company would help it in ramping up its growth and tackle its deep-pocketed rival Swiggy. Importantly, this is often the maiden bet by the US-based hedge fund in Indian online food ordering space.

In addition to the present, Zomato will be using this funding as cash reserves to fight price war within the market and check out potential acquisitions within the space, which can boost its food delivery capabilities.

This investment from Tiger Global comes every week after the Gurugram-based food tech major closed $62 million from MacRitchie Investments Pvt. Ltd., a unit of Singapore’s state investment arm Temasek’s Holdings. The Company in March raised $5 million from the Pacific Horizon investment company, which is managed by UK-based Baillie Gifford & Co. Ltd.

In July, Zomato said that its revenues doubled to $394 million, although it recorded a $293 million loss for the financial year 2019-20. In FY19, the food aggregator unicorn reported $192 million and a loss of $277 million.

As per the prevailing situation within the country, The COVID-19 induced pandemic has severely affected the food aggregator business, with delivery volumes averaging around 50% for the general industry, at present. In its latest report, Zomato estimated that business for the food delivery industry would come to pre-COVID levels within the next 2-3 months, with 70% of restaurants on its platform delivering food at present.

Zomato has also said that it'll compete aggressively with Prosus-backed Swiggy within the Indian market. It plans to travel for an initial public offering (IPO) within the half of 2021, its founder and CEO Deepinder Goyal told employees.

While the entire shareholding pattern will be out after the Series J round's coof allotment, Entrackr – one among the best Tech Startup News portal, had acknowledged the highest individual stakeholders and their worth. As per their analysis, Zomato's co-founder- Pankaj Chaddah, and chief military officer, Deepinder Goyal, is the most significant individual stakeholder within the company, controlling a 7.7% stake worth nearly $245.2 million. The co-founder Pankaj Chaddah, who moved on from Zomato in 2018 to launch MindHouse, commands a 1.75% stake in Zomato as per the newest list of shareholders filed by the corporate.

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