Info Edge invests $10M afresh in Zomato, now owns majority stake
Info Edge (India) Ltd, which runs the recruitment site Naukri.com and other classifieds such as matrimonial site Jeevansathi.com and real estate portal 99acres.com, has invested Rs 55 crore ($10.07 million) more in Zomato Media Pvt Ltd, the company that runs Zomato.com, an online food and nightlife guide.
The investment has been made by acquiring ordinary shares of Zomato Media, according to a BSE filing.
The fresh infusion of funds takes Info Edge's total investment into Zomato to Rs 86.06 crore and its holding has risen to 57.9 per cent (from 48.5 per cent), making it the majority shareholder in the company now. Following the latest deal, the post-money valuation of Zomato stands at around $55 million.
"While Info Edge has transitioned to a majority shareholding, this will not transform the operating relationship between the investors and the founders who will continue to enjoy the same operating independence as earlier. The management team of Zomato has built the company and they shall continue to grow it," said Sanjeev Bikhchandani, founder and executive vice-chairman of Info Edge.
The company will use the funds to beef up its market share and scale its sales operations in the dominant markets â€“ India and the UAE. Further international expansion is also on the cards as the company plans to enter the Philippines and South Africa in the next few months.
Commenting on the development, Deepinder Goyal, founder and CEO of Zomato, said, "We plan to use these additional funds for product development, scaling up our sales team across various locations and international expansion."
Zomato was founded by IIT Delhi alumni and ex-Bain employees Deepinder Goyal and Pankaj Chaddah in July 2008. Prior to the current round, it had raised Rs 31 crore in three rounds of external funding from Info Edge "the first round in August 2010, the second in September 2011 and the third in September 2012.
As of now, the website and the mobile app provide information (like menu, contact details, pictures, directions, ratings and reviews) about 75,000-plus restaurants across 19 cities in five countries (India, the UK, the UAE, Sri Lanka and Qatar). The current team size is 200.
Last September, Zomato launched its Dubai operations, followed by its foray into Sri Lanka (with a Colombo section) a month later. In January this year, the company expanded its footprint to Europe with the launch of a new section focusing on London. The company claims to be the largest food and restaurant portal in India with operations spanning 13 cities. It further claims that the site's traffic has grown 250 per cent over the past one year while the mobile app has seen over a million downloads across different platforms.
According to the company, more than 1,500 restaurants in India have paid Zomato in the current fiscal and the renewal rates are in excess of 80 per cent. Also, its India operations broke even at the EBITDA level in December 2012 and it is already a profitable business here. Moreover, monetisation has already started for its UAE operations and it is expected to break even at the EBITDA level within a few months.
Other Info Edge investments
Headquartered in Noida, Info Edge employs more than 2,500 people and operates through 59 offices in 35 cities in India. In addition, it has overseas offices in Dubai, Riyadh, Abu Dhabi and Bahrain. Over the past four years, the company has invested more than Rs 250 crore in nine Indian startups operating in the internet space.
These include Rs 86 crore in Zomato; Rs 31.5 crore in Meritnation, a portal offering learning solutions in the K-12 segment; Rs 30 crore in Policybazaar, an online insurance policy aggregator; Rs 27 crore in merchant marketing platform Mydala; Rs 35 crore in Canvera, an online photography company; Rs 5 crore in Happily Unmarried, an offline-online fun products retailer; Rs 28.5 crore in flash sales site 99labels and Rs 2.3 crore in Floost, a content discovery platform, among others.
(Edited by Sanghamitra Mandal)