Zomato, the food delivery giant, announced that its board has approved investments in two Indian companies: AdOnMo Pvt. Ltd. and UrbanPiper Technology Pvt. Ltd. The company would invest an aggregate cash consideration of Rs 112 crore (~$15 million ) for a 19.48 percent ownership in ad-tech company Adonmo, and Rs 37.38 crore (~$5 million) for a 5 percent stake in B2B software platform UrbanPiper.
In an exchange filing, Zomato said, “Both UrbanPiper and AdOnMo investments are synergistic to our core business and will help accelerate the growth of these companies which will help in filling important gaps in the food ordering and delivery ecosystem in India.”
UrbanPiper is a business-to-business (B2B) software platform that functions as a “middle layer” between restaurants and food ordering & delivery providers. Zomato stated that its investment will boost UrbanPiper’s expansion in the restaurant industry. According to Zomato, around 80 percent of restaurants continue to practice outdated systems or manual processes, resulting in food order delays and order processing issues. Through technology, UrbanPiper eliminates this barrier for restaurants by facilitating more restaurants in becoming ‘food-delivery ready.’ Zomato has made an investment in Urban Piper as part of a larger $24 million investment, with the goal of increasing Urban Piper’s restaurant industry penetration.
AdOnMo, on the other hand, is an ad-tech company that pushes targeted digital advertising outside personal devices to outdoor digital screens. AdOnMo’s platform expansion will enable Zomato’s food ordering & delivery business to capitalize on new digital channels for customer acquisition. AdOnMo posted a turnover of Rs 3.27 crore in FY21. It is important to note that Bace Fund LP, a venture fund in which Zomato co-founder Deepinder Goyal has invested $100,000, is an AdOnMo investor.
The potential investments are each subject to the completion of certain customary precedent conditions as well as other terms & conditions agreed upon in the investment agreements. Zomato additionally informed the exchanges that the board of directors approved the incorporation of a wholly-owned subsidiary – Zomato Payments, as a Non-Banking Finance Company (NBFC) during its meeting.
The latest investments are aligned with Zomato’s strategy of investing in core food businesses and the surrounding ecosystem. It had committed to invest $1 billion in the startup ecosystem during the next one to two years.
In the six months before November 2021, the food-tech giant has already injected $275 million across four startups. This includes a $100 million investment in quick commerce service Blinkit (formerly Grofers), a $75 million investment in logistics technology player Shiprocket’s parent Bigfoot Retail Solutions, a $50 million investment in Samast Technologies Pvt. Ltd, which operates hyperlocal discovery platform Magicpin and a $50 million investment in fitness technology player Curefit.