Zomato has raised $250 million, two months after closing a $660 million Series J financing round, because the Indian meals supply startup builds a war-chest forward of its IPO later this yr.
Kora (which contributed $115 million), Constancy ($55 million), Tiger International ($50 million), Bow Wave ($20 million) and Dragoneer ($10 million) pumped the brand new capital into the 12-year-old Gurgaon-headquartered startup, Data Edge, a publicly listed investor in Zomato, disclosed in a filing (PDF) to a neighborhood inventory alternate. The brand new funding offers Zomato a post-money valuation of $5.Four billion, up from $3.9 billion in December final yr, stated Data Edge, which owns 18.4% stake within the Indian startup.
The brand new funding reinforces the robust confidence buyers have in Zomato, which struggled to raise money for a lot of final yr. Zomato, which acquired the Indian food delivery business of Uber early final yr, competes with Prosus Ventures-backed Swiggy (valued at about $3.6 billion) in India. Collectively they work with over 440,000 supply companions, a bigger workforce than that employed by Indian Division of Posts.
A 3rd participant, Amazon, additionally entered the food delivery market in India final yr, although its operations are nonetheless restricted to elements of Bangalore.
At stake is India’s meals supply market, which analysts at Bernstein anticipate to balloon to be price $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 discover the food-tech trade in India to be properly positioned to sustained development with enhancing unit economics. Take-rates are one of many highest in India at 20-25% and client traction is growing. Market is essentially a duopoly between Zomato and Swiggy with 80%+ share,” wrote analysts at Financial institution of America in a current report, reviewed by TechCrunch.
Zomato and Swiggy have improved their finances in recent years, which is particularly spectacular as a result of creating wealth with meals supply could be very usually tougher in India. In contrast to 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 $Three to $4, in line with analysis companies.
Each the startups eradicated tons of of jobs final yr because the coronavirus pandemic hit their companies. Zomato co-founder and chief govt Deepinder Goyal stated in December that the meals supply market was “quickly popping out of COVID-19 shadows.”
“December 2020 is predicted to be the best ever GMV month in our historical past. We at the moment are clocking ~25% greater GMV than our earlier peaks in February 2020. I’m supremely enthusiastic about what lies forward and the affect that we are going to create for our prospects, supply companions and restaurant companions,” he stated.
In an e mail to staff in September final yr, Goyal stated Zomato was engaged on its IPO for “someday within the first half” of 2021 and was elevating cash to construct a war-chest for “future M&A, and combating off any mischief or worth wars from our competitors in numerous areas of our enterprise.”
