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Zomato Raises $62.5 Mn to Catch up with rival Swiggy

Food delivery major and online restaurant discovery platform Zomato has raised $62.5 Mn (nearly Rs 441 crore) in a latest funding round. The German food-tech giant and Naspers backed Delivery Hero spearheaded the funding round. Naspers indirect presence as a stakeholder in Zomato makes for an interesting proposition as it is the largest stakeholder in the rival Swiggy.

The official logo of Zomato
Zomato Raises $62.5 Mn in fresh funding round.

Other investors that participated in this round are Chinese investors Shunwei Capital and Saturn Shine, as per the company’s latest filing filed with Registrar of Companies (ROC).

Following the round, Delivery Hero with Rs 350 crore investment will own 2% stake in Zomato while Shunwei Capital ends up owning 0.23% stake by virtue of its Rs 35.06 crore investment, according to VCC Circle, which was the first to report about the development.

Saturn Shine, on other hand, will infuse rest of the cash to take up 0.36% in the Gurgaon based foodtech delivery company.

The latest funding round has come barely a month after the Gurgaon headquartered company had raised $39.74 million (Rs 284 crore) from a US investor Glade Brook Capital Partners. Both funding rounds are part of the same series I round.

The pressure on Zomato to opt for another funding round was all too obvious, after its rival Swiggy raised a whopping $1 bn from Naspers and others at the fag end of last year.

When it comes to key metrics determining the health of the balance sheet, there is nothing much to choose between Zomato and Swiggy. But Zomato earned slightly higher revenue at Rs 466 crore in FY18 as compared to Swiggy’s Rs 442 crore in the same period. Zomato’s losses also stood far lesser at Rs 106 crore as compared to Swiggy’s losses at Rs 397 crore in FY18.

However, Swiggy has managed to march ahead of its main rival when it comes to fundraising and market valuation. Today Swiggy’s  valuation stands at nearly $3.3 bn whereas Zomato’s valuation stands at nearly $2 bn.

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