Zomato raises $62 mn from Temasek in ongoing growth round

Restaurant aggregator and food delivery platform Zomato has raised Rs 456 crore (about $62 million as per current exchange rates) in a growth funding round from returning investor Temasek Holdings.

The capital infusion was made via the Singapore state investor’s indirect wholly-owned subsidiary MacRitchie Investments, regulatory filings showed.

The Gurugram-based startup looks to raise capital in the same round from alternative investment firm Tiger Global Management and US investment firm Kora Capital, The Economic Times reported. They are expected to infuse $100 million each into the startup in the coming weeks, it said, adding that Tiger may pump in an additional $100 million if the startup takes its business back to pre-Covid levels.

A Zomato spokesperson declined to respond to TechCircle’s queries.

Temasek first invested in Zomato in September 2015. In July 2019, it participated in a $35 million secondary deal, where it acquired stakes from the company’s co-founder Pankaj Chaddah. Chaddah resigned from the company in March 2018.

Temasek’s follow-on investment comes at a time when the footech unicorn is yet to receive $100 million of the $150 million fundraising it announced in January from returning investor Ant Group, previously known as Ant Financial. The Ant Group is the payments affiliate of Chinese conglomerate Alibaba. 

The company is evaluating the situation  as India recently tweaked its foreign direct investment (FDI) policy, mandating Chinese investors to get specific approval to invest in Indian firms, Info Edge founder Sanjeev Bikhchandani said. He mentioned at the time that the company has received inbound interest from other investors, who don’t need permission. Info Edge is an early investor in Zomato.

The Ant Group investment valued the company at $3 billion, pre-money.

In its last known funding round, Zomato raised around $5 million from Pacific Horizon Investment Trust, a fund managed by British investment management firm Baillie Gifford, in April. 

It received funds from Delivery Hero in March last year, when it sold off its UAE business to the Berlin headquartered online food delivery firm. During the round, Zomato raised an additional $62.25 million from a clutch of investors including Delivery Hero and Chinese venture capital firm Shunwei Capital.

In February 2019, it raised Rs 284.42 crore from the US growth equity firm Glade Brook Capital.

Zomato was founded in 2008 by Indian Institute of Technology-Delhi alumni Deepinder Goyal and Chaddah, who were both executives at management consultancy firm Bain & Company. It makes money through advertising, online ordering and subscription.

The firm recently said India’s food delivery industry has largely recovered from the impact of Covid-19, registering 75-80% of pre-Covid gross merchandise value (GMV).

The company doubled its year-on-year revenue to $394 million for the financial year 2019-20 from $192 million, even as its losses widened to $293 million from $277 million a year ago. It reported a revenue of $41 million with an EBITDA loss of $12 million during the Covid-19 hit June quarter of FY21, the company announced in a blog post.