Alibaba pumps USD 200 million in Zomato; Info Edge’s share diluted by 6.6%

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Updated: February 2, 2018 10:39:29 AM

The deal, which is an amalgam of primary and secondary share transactions will see Alipay invest $150 million as primary capital. While the existing investor Info Edge will dilute its holding by 6.6 percent in the company.

Alibaba pumps 0 million in ZomatoJack Ma, Founder and Executive Chairman of the Alibaba Group

The Indian online restaurant search and food delivery platform Zomato has raised $200 million in an investment round led by Jack Ma’s Alibaba Group, it said in a statement. The latest round has been led through Ant Small and Micro Financial Services Group, a subsidiary of Alibaba, which operates Paypal-like platform Alipay, Zomato’s parent company Info Edge India Ltd said in a BSE filing.

The deal, which is an amalgam of primary and secondary share transactions will see Alipay invest $150 million as primary capital. While the existing investor Info Edge will dilute its holding by 6.6 percent in the company.

“Post the aforesaid fundraise by Zomato, Info Edge’s aggregate shareholding in Zomato shall be about 30.91% on a fully converted and diluted basis,” the statement said.Alibaba is expected to own around 26% stake in Zomato after the $200 million sale via primary and second transactions.

Zomato had narrowed its losses to Rs 389 crore in 2016-17 from Rs 590.1 crore in the year-ago period, according to the annual report of its largest shareholder Info Edge (India) Ltd. Zomato had posted revenue of Rs 332.3 crore for 2016-17, up 80.6% from Rs 183.9 crore in the previous fiscal year.

According to a recently released TechSci Research report, “India Foodtech Market – 2011-2021”, the foodtech market in India is projected to grow at a CAGR of over 12% during 2016-2021. Growth in the market is anticipated on account of increasing disposable income, growing average household income and rising trend of double-income-no-kids concept.” Recently, Morgan Stanley pegged the food delivery market in India at $19 billion.

It’ll be interesting to see how Jack Ma’s experience and expertise helps Zomato compete with other food delivery players such as FoodPanda and Uber’s recently launched UberEats.

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