Online food delivery platform Zomato has raised Rs 760 crore in its Series J funding round from Tiger Global Management even while the coronavirus pandemic has severely hit most businesses.
Online food delivery platform Zomato has raised Rs 760 crore in its Series J funding round from Tiger Global Management even while the coronavirus pandemic has severely hit most businesses. The fresh funding tranche comes right after the company closed a $62 million fund from Temasek’s MacRitchie Investments. Zomato has made an allotment of 25,313 Class J preference shares at an issue price of Rs 3,09,235 per share to raise the amount, according to a Tofler report. According to the current deal, Zomato has been valued at $3.4 billion and will part with 25,313 shares.
The fresh funds for the Gurugram-based food delivery major will help it in ramping up growth while also raising heat for its deep-pocketed rival Swiggy. With its investment in Zomato, the US-based hedge fund has made its debut in the Indian online food ordering space. Post allotment, Tiger Global will command a 3.01% stake in the company. So far in 2020, Zomato has picked up around $167 million in external funding. Prior to Temasek’s investment in August, the food-tech firm had also scored a $5 million from Pacific Horizon Investment Trust in March 2020.
The fresh funding comes at a crucial time for Zomato which hasn’t been able to secure funding from one of its largest backers Ant Financial due to a ban on foreign direct investment (FDI) under the automatic route from countries that share a border with India. Ant Financial is a China-based IT-services management company.
Zomato’s revenue grew 105% to $394 million in FY20. The company also reported an increase in its losses to $293 million, compared to $277 million in FY19. The company also laid off 13% of its workforce stating a business hit amid the pandemic. The company is now focusing on driving efficiency. “In the last few quarters, we have fast-tracked our efforts towards making our business profitable and driving efficiency into our spends. While COVID-19 has impacted the size of our business, it has accelerated our journey to profitability,” Deepinder Goyal, founder and CEO, Zomato said in a blog post in July.