Zomato Media, which owns and operates the eponymous online food delivery and restaurant discovery platform, has sold its United Arab Emirates delivery business to the Berlin-based Delivery Hero for $172 million.
The Gurgaon- based company, which is fighting a bruising battle with its cash rich rival Swiggy, has also raised $105 million in its latest funding tranche.
Zomato said that it has sold its UAE business, which was operated by its subsidiary Talabat Middle East, to Naspers-backed Delivery Hero Group but will continue to own and run its allied businesses, which include, Zomato Gold and ad sales, among others.
Naspers, incidentally, is also the largest institutional stakeholder in Zomato’s biggest rival, Swiggy. The South African media and internet conglomerate last pumped in $660 million in Bengaluru-Headquartered Swiggy, which was part of a larger $1 billion equity financing round in December last year.
Zomato, which counts Ant Financial, Info Edge and Sequoia Capital among its primary list of investors, has raised $105 million, as part of its Series I funding round, with Delivery Hero, Glade Brook Capital, Shunwei Capital and Saturn Shine coming on board its investor cap table.
The latest tranche follows the $210 million it had raised from Ant Financial and its affiliates in October last year at a valuation of $2 billion. As part of the round, Info Edge, an early backer of Zomato, will see its shareholding in the company drop to 26.38%, from 27.68% on fully converted and diluted basis.
Ant Financial’s stake in Zomato is estimated at about 28%, making it the largest stakeholder in the company.
This is the second dilution by Info Edge in Zomato in the last five months. In October, it had disclosed in a stock exchange filing that its ownership in the company had reduced from 30.91%. In January, Sanjeev Bikhchandani, executive vice chairman of Info Edge, had stated that the company would not participate in a follow-on round.
Zomato, which saw its co-founder Pankaj Chaddah depart the company last year, has been in talks with multiple investors for its next round of funding, estimated at $1 billion, as it continues to battle rival Swiggy for dominance in the capital intensive food delivery space.
The company’s food delivery business contributes about 55% to its overall revenue.
Zomato ended FY18 with a 40% growth in revenues at Rs 466 crore. The firm cut its loss by almost 73% to come in at Rs 106 crore in FY18 as compared to Rs 390 crore last year, according to financial documents filed with the registrar of companies and accessed by data research platform Tofler.
The latest set of developments come a time when there is further consolidation anticipated in India’s burgeoning food delivery business. Last month, ET was the first to report that Uber Eats, the food delivery arm of the global ride-hailing platform, was in final stages of negotiations to sell its India business to rival Swiggy in what is expected to be primarily share swap deal.
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