Zomato, which is a popular online food delivery firm, has been able to cover up and ask Alipay to exit as an equity partner. The firm got funding from the Chinese e-commerce giant Alibaba’s payment system, Alipay 3 years back.
According to a stock exchange filing by Info Edge, On Friday, the firm signed a complete pact with Alipay Singapore Holding Pte Limited. This is for the initial fundraising. Also post-funding, as per Info Edge, in this particular deal, the stake in the company was reduced from 30.91% to 27.68%.
This particular round of funding was known to be the second fundraiser for the food delivery firm. Also, Alipay invested $200 million earlier in Zomato. This included an initial investment of around $150 million along with the purchase of Stack, which was around $50 million by Info Edge. With this deal, Zomato, an online food delivery firm, was estimated to be around $1 billion. Now, after 3 years of operation; Zomato shares have experienced a surge of over 90% this year; with this, Alipay wanted to capitalize on the favorable market conditions and looking out for an exit.
The decision by Alipay to exit Zomato aligns with a broader thought of the investors reducing their holdings.
Additional funding from Ant Financial
After joining the unicorn club, as per media reports, Zomata is getting an additional $210 million in funding. According to the Info Edge filing, Zomato has agreed to undertake a main fundraising estimated at close to $210 million. This investment will raise Zomato’s valuation from $1.1 billion to around $2 billion. Also, the Ant’s stake is going to rise to more than 10 percent.
In February, the food delivery firm raised around $150 million. However, the Alibaba affiliate decided to secure the rights to be the biggest shareholder in this popular food tech startup. On the contrary, Zomato’s biggest rival, Swiggy, is speculated to be in talks to raise around $600 million, which would lead to a valuation of around $3 billion.
About Zomato
Zomato entered the online food delivery market when its biggest rival, Swiggy, was already established. Since then, this Delhi-based platform has given tough competition to the Bengaluru unicorn and a run for its money
Last month, Zomato announced that it would be entering the B2B food tech space. It acquired TongueStun, which is a Bengaluru-based online caterer. Also, it is an office canteen aggregator.
Interestingly, food tech unicorns such as Swiggy and Zomato are fighting an aggressive growth battle. Swiggy is known to have acquired 48 East and Mumbai-based Scootsy. It also launched Capital Assist, Packaging Assist, as well as Swiggy Access
