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Tiger Global Debuts in Food Tech with $102 Mn funding in Zomato

Zomato has raised fresh $102 Mn or INR 760 crore from Tiger Global in the ongoing series J round, this is a top-up from $62 Mn it secured from existing investor Temasek barely a week ago. Investors are apparently showing palpable confidence in the company despite the fact that foodtech sector was reeling badly in the aftermath of Covid-19 lockdown.

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The investment also marks Tiger Global’s debut in India’s foodtech sector. Despite being one of the most prolific investors in India’s startup ecosystem, until this investment Tiger Global had not invested in any major online food delivery startups.

According to regulatory filings, Tiger Global has been allotted 25,313 class J preference shares at an issue price of Rs 3,09,235 per share.

Notably, before kick starting the latest funding raising spree Zomato increased its authorized share capital to nearly Rs 433 crores in mid-August. To increase its authorized share capital, the company has added 9 lakhs equity shares while adding 1 lakh preference shares.

In another important development, Zomato has also allotted worth $52 Mn or 182 crores fresh equity shares to its ESOP trust. ROC filings showed that the Gurgaon based company has allotted 12015 equity shares at a premium rate of Rs 1,53, 271 per equity shares. The ROC filing showed that Zomato’s CFO Ms Akriti Chopra oversees this ESOP trust.

Zomato reported revenue of $394 Mn in FY20, with its revenue increasing by almost 105% on year-on-year basis. Its losses, on other hand, climbed marginally to reach $293 Mn. However, the exact impact of covid-19 lockdown on Zomato’s business will be known only when the company releases its annual financial report for FY21.

According to reports, Zomato is now gearing up for an IPO in FY21. Sources claim that Zomato’s CEO Deepinder Goyal has informed its employees via mail that the company has already started making preparation for public listing next year. Sources also add that the company is in the process of selling $30 Mn share sale as part of its ESOP scheme for its ex-employees. This ESOP sale is only meant for Zomato’s ex-employees and the current employees will not be part of it.

In the mail, Goyal has reportedly stated that the current employees can generate more wealth via ESOP sale during the IPO next year.

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