Economy

Zomato raises $150 m from Alibaba arm; co-founder quits

Priyanka Pani Mumbai | Updated on March 02, 2018 Published on March 01, 2018

Ant Fin also buying $50-m shares from parent Info Edge

On the day its co-founder Pankaj Chaddah decided to move on, online food discovery and ordering platform Zomato raised $150 million (around ₹915 crore) in a fresh round from Alibaba’s financial service arm Ant Financial Services Group.

As part of the transaction, Ant Financial is also buying $50 million worth of shares from the BSE-listed Info Edge, also the parent company of Zomato, by taking the total investment from Ant in Zomato to $200 million.

Including the latest round Zomato has raised over $500 million in 10 rounds since its inception in 2008 and has pushed up its valuation to over $ 1 billion.

To invest in technology

Zomato said that it will be using the investment to further strengthen its leadership position in its core markets by investing in product and technology and offering more convenient and seamless payment options to its users in partnership with Ant and Ant’s strategic mobile wallet partners such as Paytm in India. Besides, in the wake of recent fire incidents in several restaurants across the country, Zomato working with restaurants to put up fire safety licence scans on Zomato.

Deepinder Goyal, Founder and CEO of Zomato, said: “At Zomato, our long-term vision is ‘better food for more people’. We believe that Ant is the right strategic partner for our business at this stage and we can gain tremendously by learning from and leveraging their global network, scale and technology.”

The funding also comes in at a time when the food-tech industry in India has started picking up momentum after taxi-hailing companies Uber and Ola heightened their focus and investments in their respective food ordering businesses UberEats and FoodPanda (acquired by Ola last year).

Early this year, Bengaluru-based Ola had announced a ₹400-crore investment to improve its distribution network and adding more restaurants. UberEats, which entered the Indian market last year, has been expanding. It has already onboarded over 6,000 restaurants on its platform across eight major cities.

Zomato’s fresh round would help the company take on newer and smaller players like Swiggy, which raised $100 million in February.

Co-founder quits

Pankaj Chaddah, co-founder of Zomato, has quit after leading the company for the last one decade. In a tweet he said, “After 10 years, I am moving on from @Zomato to try out something new. I’ll continue to play an active role till the end of this month. Have been thinking about this for a while, and the timing seems right today as Zomato is back to being a rocket-ship.”

 

Published on March 01, 2018
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