New Delhi: Food-tech startup Zomato Media Pvt. Ltd has raised ₹284 crore ($40 million) in fresh funding from US investor Glade Brooke Private investors, according to documents accessed from business intelligence platform Paper.vc.
The fresh funding is a part of the Series I round, where Zomato raised $210 million from existing investor Ant Financial in October last year. Zomato was valued at $2 billion after the last round of funding.
The investment comes at a time when Zomato is locked in an expensive battle with arch-rival Swiggy, which raised $1 billion in funding from Naspers Ltd and participation from China’s Tencent-backed Holdings Ltd in December last year. The round saw Swiggy’s valuation shoot up to $3.3 billion.
Gurugram-based Zomato is also in talks to sell its UAE business for $200-$250 million to Germany’s Delivery Hero, according to a Times of India report.
As the food-delivery war intensifies, Zomato is in talks to raise $500 million-$1 billion in a new financing round from Chinese private equity major Primavera Capital and existing investor Alibaba’s payment affiliate, the Economic Times reported in January.
Despite investors becoming wary of the food tech sector, top companies, including Zomato and Swiggy, have been raising continuous rounds of capital to win share in a cut-throat market.
Swiggy, which is foraying into the hyper local delivery space, made its first acqui-hire through AI startup Kint.io, Mint reported on February 4.
Zomato also acquired TechEagle Innovations for an undisclosed amount in December last year to build the base for drone-based food delivery.
The food-tech sector, which not so long ago saw capital dry up given the sector’s poor-economics, has once again bounced back following entrants such as UberEATs and Ola’s acquisition of Foodpanda.
Zomato, currently present in 24 countries, earns revenues from advertising and food delivery.
The company’s revenues grew 40% to ₹466 crore in the year ended March 2018. The company also reduced losses by 73% to ₹106 crore against ₹390 crore in the previous financial year, according to documents sourced from data research platform Tofler.
According to a recent survey by research firm RedSeer Consulting, Swiggy (Bundle Technologies Pvt. Ltd) has emerged as the top online food chain. It outscrored Zomato in metrics such as customer satisfaction, value for money and delivery experience, followed by UberEATS and Ola’s Foodpanda.
Food-tech companies came under the radar recently for deep discounting and data masking on online orders, after the National Restaurant Association of India (NRAI) raised concerns on the same.
Zomato recorded a 28-million order run rate in December 2018, jumping from 21-million orders in October. All food-tech players are looking to aggressively expand to new cities, launch new products and burn cash to win customers.