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Zomato is expecting to receive $150 million in funding round

Food delivery startup Zomato is expecting to receive a funding of $150 million. The companies participating in the ongoing funding round are Steadview, Mirae Asset, Luxor & Bow Wave. Zomato’s total funding received will be very well over $500 million if the money from these investors comes through.

Details about the investment

Last Month Zomato raised the $103 million from Tiger Global, a New-York based investment firm in Series J funding. Tiger Global was allotted 25,313 class j4 preference shares after the investment. So, that roughly estimates to around Rs 3,00,325 per share. Zomato’s estimated value made a straight jump from $3.25 billion to $3.4 billion after the investment.

Image Source: Entrackr

Zomato also received $5 million from British investment manager Baillie Gifford’s Pacific Horizon Investment Trust at $3.25 billion evaluation. But, reports suggest that there is a chance it will be considered as a $3 billion company by the four upcoming investors Steadview, Mirae Asset, Luxor & Bow Wave. If the investment goes through the total funds raised in the round willadd up to $575 million.

Future Plans of Zomato

Deepinder Goyal said to his employees, “We have raised a lot of money, and today, our cash in the bank (~$250m) is more than ever in our history. Tiger Global, Temasek, Baillie Gifford, and Ant Financial have already participated in our current round, and there are more big names joining the round – we estimate that our current round will end up with us at $600m in the bank very soon”.

Zomato

Image Source: OpIndia

He also said that they plan to just the money to fight price wars in the future. At present, they have no fixed plans on using the investment they have received. Once they get ahold of even more market share, they will use the money to attract customers. He said:

“The best part is that our burn rate is very low, and our market share is accelerating in all regions. We have no immediate plans on how to spend this money. We are treating this cash as a ‘war-chest’ for future M&A, and fighting off any mischief or price wars from our competition in various areas of our business”

Though Zomato’s revenue has doubled in the Financial Year 2019-20, its losses were also enormous, standing at $293 million. The COVID-19 pandemic has also affected the food delivery business adversely. With very few people ordering and far fewer restaurants operating, Zomato’s revenue is taking a hit. But, they expect the situation to get better in a few months.


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Read: Agritech startup Ergos receives Rs 23.5 Cr from Chiratae

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