Zomato, the leading food ordering and restaurant discovery platform, has raised $200 million from Ant Financials, an affiliate company of China’s Alibaba Group. The new funding values Zomato Media Pvt. Ltd. at $1.1 billion, making it another unicorn in India’s startup ecosystem. Also Read - Best online gaming platforms to play multiple games: Paytm First Games, PlayerzPot and moreAlso Read - Zomato IPO share allotment status: How to check IPO allotment status online
Info Edge (India) Ltd, the company that runs job portal Naukri sold its $50 million secondary share to Ant Small and Micro Financial Services Group. Info Edge is the key shareholder of Zomato and it plans to dilute its stake to about 30.91 percent post the fresh capital infusion by Ant Financials. The sale of primary and secondary shares valued the company at $880 million, reports Mint citing statement filed by Info Edge with Bombay Stock Exchange. Also Read - Internet down: Zomato, Paytm, Disney+ Hotstar, Amazon, Myntra, many other global services suffered massive outage
Alibaba recently took 33 percent stake in Ant Financials paving way for latter’s initial public offering in China. Ant Financials finds Zomato attractive from investment perspective due to its hyperlocal business model despite the fact that startups have failed in that segment. The investment arm of Alibaba believes that Zomato can replicate the success of Meituan-Dianping, one of the most valuable hyperlocal platform in China.
The investment comes at a time when Alibaba Group is trying to strengthen its presence in markets like India, South-East Asia, New Zealand and Australia. Info Edge notified BSE that the sale will close on or before April 15, 2018.
Ahead of the sale, Info Edge owned about 44.74 percent of stake in Zomato and it said that Zomato had a net sales of Rs 332.27 crore during financial year 2016-17 on a consolidated basis. Zomato did not offer any comment on the new investment, but said it will continue to keep going forward with its business model despite challenging environment.
Ant Financials’ other major investment is in payments platform Paytm and the new deal could lead to both the startups working more closely to integrate their products. Zomato has been primarily a food technology platform but was forced to offer food ordering service after the rapid expansion of its rival Swiggy. Both the companies are engaged in a battle for market share as more Indians go online and experience new ways of ordering food.