Alipay gains voting-rights edge at Zomato

Alipay gains voting-rights edge at Zomato
Photo Credit: Photo Credit: Reuters
11 Sep, 2018

The payments affiliate of Chinese e-commerce titan Alibaba Group Holding Ltd has tightened its grip on Zomato Media Pvt. Ltd after betting $200 million on the Indian food-delivery and restaurant discovery company earlier this year.

Alipay Singapore Holdings Pte Ltd, part of Alibaba affiliate Ant Financial Services Group, now enjoys greater voting rights in Zomato than any other shareholder in all matters related to the Indian company, according to regulatory filings.

Zomato revised its Articles of Association in February after the funding round, which involved Alipay investing $150 million in the Indian company via preference shares and separately buying a $50 million stake from Info Edge (India) Ltd.

Info Edge, operator of a host of internet businesses such as job portal Naukri.com and property website 99acres.com, owns a 30.91% stake in Zomato after the transaction. Alipay owns about 22% of Zomato.

However, as per the revised Articles of Association, Alipay holds an edge in voting rights. It can, for instance, vote on all matters submitted for the consideration of the company’s shareholders, including those who hold ordinary equity shares.

Moreover, if any laws don’t permit Alipay to exercise its voting rights, then Zomato founder Deepinder Goyal shall vote as per its instructions, the filings show.

The Economic Times, which first reported the development, also said that Alipay has secured the right to become the largest shareholder in Zomato as well and that Alibaba can also subscribe to the food delivery company’s shares. Besides, Alipay will have a say on any strategic agreements by Zomato in payments, online-to-offline services and e-commerce segments, the report said.

Zomato was valued at $1.1 billion when it raised funds in February. The company, which competes with Swiggy and Ola-owned Foodpanda, is reportedly planning to raise another $400 million in a new round of funding. Zomato is said to be in talks with Chinese online travel portal Ctrip for this round.