Zomato and Bengaluru-based Swiggy are locked in an intense competition to grab a bigger pie of India’s online food delivery market.
As fund raising in the online food delivery space intensifies, Zomato has raised Rs 284.42 crore in fresh funding from US-based Glade Brook Capital, according to documents sourced from business signals platform paper.vc. The investor has been allotted 13,000 class 1 compulsory convertible cumulative preference shares (CCPS) by Gurgaon-based Zomato on Tuesday, the documents showed. The investment is part of its series-1 financing round. Glade Brook Capital has made some marquee investments in global tech companies like Alibaba, Uber, Airbnb, among others.
Zomato has raised around $600 million in funding, so far. The company had raised $210 million in October led by Ant Financial, an affiliate of China’s Alibaba Group Holding, at a valuation of around $2 billion. According to media reports, Zomato is in talks to raise up to $1 billion in fresh funding and discussions are underway with China-based investment firm Primavera Capital and existing backer Ant Financial besides other investors for the same.
Zomato and Bengaluru-based Swiggy are locked in an intense competition to grab a bigger pie of India’s online food delivery market. Swiggy raised $1 billion in December led by South African internet and media group Naspers that valued the firm at an estimated $3.3 billion.
With huge amount of capital being poured into the food delivery firms, the companies are scaling up rapidly. From a 15 million run rate order in March 2018, orders are up at around 65 million currently, analysts at Kotak Institutional Equities (KIE) estimate. This growth has primarily been driven by Swiggy and Zomato, they added.
Food delivery companies raked in Rs 40-70 per order in the year ended March 2018, according to KIE. Analysts at KIE noted that Zomato’s revenues lagged that of rival Swiggy’s in FY18. While Zomato earned Rs 139.9 crore in FY18, Swiggy’s revenues stood at Rs 420.5 crore.