Nowadays, Zomato is the go-to choice for ordering food online. The food delivery app has expanded massively in recent years. Recently, it raised a funding of $103 million backed by Tiger Global. Zomato is slowly catching up to speed to Swiggy and is currently valued at $3.4 billion. The company is also planning to go public by the mid of 2021.
Details about the investment
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.
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”.
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 doubled in the FY2019-20, its losses were also enormous, standing at $293 million. The COVID situation has also affected the food delivery business. With fewer people ordering and considerably fewer restaurants operating, Zomato’s revenue is taking a hit. But, they expect the situation to get better in a few months.
Which food delivery platform do you use, Zomato/Swiggy/Foodpanda? Do let us know in the comments below. I personally prefer using the one which gives me the cheapest deal on the food I am ordering. And, If you found our content informative, do like, and share it with your friends.