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Zomato To Raise $ 200 Million From Alibaba And Alipay

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Zomato To Raise From Alibaba,Ant Financial Services Group,Alipay,Paytm,Zomato Latest News,Zomato Updates,2017 Latest Business News,Startup Stories


Zomato Media Pvt., Ltd., the online restaurant discovery and food ordering platform is reportedly in talks with Alibaba’s payments firm Ant Financial Services Group to raise $ 200 million. This potential round of investment could value the company between $800 million and $900 million or even up to $1 billion.

The deal, which hasn’t been finalized yet, could see the Chinese ecommerce giant pick up a major stake in the company. A major news daily reported this round could finally allow Zomato to earn that Unicorn tag that it missed by a small margin during the last round of financing. Zomato, which has been in the market to raise funds since the beginning of the year, declined to comment.

Ant Financial, also known as Alipay, is also looking to strengthen its foothold in South East Asian markets like India, New Zealand and Australia. Zomato which has a strong presence in Southeast Asia and the Middle East will add to Alibaba and Alipay’s global play. The deal will also allow the food discovery platform to work closely with the digital payments platform Paytm, which counts Ant Financial as one of its largest investors.

Launched in 2008, Zomato has raised over $ 200 million in funding rounds with the latest being $60 million from Temasek and Vy Capital in September 2015. The investment valued the firm at about $960 million, barely missing the $ 1 billion mark. Zomato, at present, is competing against food ordering platforms such as Bundl Technologies Pvt., Ltd., owned Swiggy, which is backed by South African media giant Naspers. Swiggy raised $ 80 million in funding from Naspers in May this year and has already raised over $160 million in equity and debt, since its launch in 2014.

Zomato, which was forced to introduce food ordering on its platform, saw an 89% rise in revenue which reached Rs. 334 cores for the financial year 2017. But Zomato’s fight with Swiggy for market leadership in the food delivery space is more capital intensive. Zomato claims that for the first time in July this year they have delivered over 3 million monthly orders, maintaining that its average order value is higher than that of its competitor, resulting in higher gross sales.

 

Watch how Zomato came to dominate the restaurant discovery and online food ordering sector here –

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Supreme Court Puts End to Misleading Celebrity Endorsements 

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Supreme Court Of India

The Supreme Court of India has taken a strong stance against misleading advertisements featuring public figures, emphasizing their responsibility in promoting products. This decision comes in response to concerns about the influence celebrities and public figures hold over consumer choices.

 

The Heart of the Matter:

 

The court’s ruling highlights two key points:

 

  1. Shared Responsibility: Advertisers, advertising agencies, and the public figures endorsing products are all equally liable for issuing misleading advertisements. This means that celebrities can no longer simply lend their face to a product without due diligence. They are expected to have a good understanding of the product and its claims before endorsing it.

 

  1. Self-Declaration:  The court mandated a stricter protocol requiring advertisers to obtain a self-declaration from endorsers. This declaration, similar to the Cable Television Networks Rules (1994), ensures that the advertised product complies with existing laws and avoids offensive content.

 

Why it Matters:

 

Celebrity endorsements hold immense power in influencing consumer behavior. Consumers often trust the judgment of their favorite actors, athletes, or social media personalities. This trust can be exploited by promoting products with exaggerated claims or those lacking scientific backing. 

 

The Case that Triggered the Ruling:

 

The court’s decision stemmed from a case involving Patanjali Ayurved Ltd., a popular Indian consumer goods company, and yoga guru Ramdev. The Indian Medical Association (IMA) filed a plea against the company and Ramdev, accusing them of misleading advertisements and a smear campaign against COVID-19 vaccinations and modern medicine.

 

The Road Ahead:

 

This ruling is a significant step toward protecting consumers from deceptive marketing practices.  It encourages celebrities and public figures to be more selective and responsible about the products they endorse. Additionally, the court urged government bodies to implement procedures for consumers to easily report misleading advertisements. 

 

This move by the Supreme Court is likely to have a ripple effect across the advertising industry in India.  It will force companies to be more transparent and hold celebrities accountable for promoting products they don’t fully understand or that make unsubstantiated claims. 

 

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Mercedes Hits the Brakes on EVs: Profit Woes Lead to Focus on Gas-Powered Cars

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Luxury carmaker Mercedes-Benz is experiencing a shift in gears, prioritizing gasoline-powered vehicles over its previously ambitious electric vehicle (EV) strategy. This comes after disappointing sales figures and shrinking profit margins for their electric offerings.

The Dream Runs out of Charge:

Mercedes, a leader in the luxury car market, had set a goal to be fully electric by 2030. However, sluggish sales of their electric vehicles, particularly the high-end EQS and EQE sedans, have forced a recalibration of their plans. The company’s profit margin dipped to a concerning 9% in the first quarter of 2024, falling below their long-term target range.

Why the Slow Charge?

Several factors are contributing to the lackluster performance of Mercedes’ EVs:

  •  Price Point Pinch: The high price tag of Mercedes’ electric cars, ranging from $70,000 to $120,000, limits their appeal compared to more affordable electric options. 
  •  Competition Heats Up: Other luxury carmakers like Tesla and BMW are offering strong competition, with some even surpassing Mercedes in EV sales growth. 
  •  Infrastructure Concerns: Gaps in charging infrastructure and anxieties about range remain significant deterrents for potential EV buyers.

Back to the Drawing Board:

In response to these challenges, Mercedes CEO Ola Källenius announced a revised strategy. The company will:

  •  Extend Focus on Combustion Engines:  Production of gasoline-powered and hybrid vehicles will continue well into the 2030s, catering to customer demand.
  •  Rethink EV Strategy: Mercedes will analyze consumer preferences and market trends to refine their electric car offerings. This may involve focusing on more affordable models or improving features to enhance range and charging efficiency.

The Road Ahead

The shift by Mercedes highlights the complexities of the automotive industry’s transition to electric vehicles. It underscores the need for car manufacturers to balance ambitious environmental goals with the realities of consumer behavior and market competition.

Is this a Permanent Pause?

While Mercedes is putting the brakes on its all-electric vision, it doesn’t necessarily signal a complete retreat from EVs. The company may leverage this time to strengthen its electric offerings and ensure they are competitive in the rapidly evolving market. Only time will tell if Mercedes can reclaim its position as a leader in the electric vehicle race.

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Reddit Soars After Strong Earnings and Upbeat Outlook

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Reddit, the social media platform known for its online communities and meme culture, saw its stock price jump significantly after releasing its first earnings report since going public in March. Investors were impressed by the company’s strong financial performance and optimistic forecasts for the future.

The report highlighted a surge in user engagement, with daily active users increasing by 37% to 82.7 million in the first quarter. This growth was accompanied by an 8% rise in average revenue per user, indicating Reddit’s success in monetizing its platform. 

Perhaps the most significant factor driving the stock price increase was Reddit’s forecast for the second quarter. The company projected revenue to fall between $240 million and $255 million, exceeding analyst expectations. Additionally, Reddit anticipates achieving break-even status or even generating a profit, surpassing predictions of a loss.

This positive outlook can be attributed in part to Reddit’s flourishing advertising business. The company is also capitalizing on a new revenue stream: content licensing deals with artificial intelligence (AI) firms. Reddit’s vast collection of user-generated content provides valuable data for training AI models, attracting companies like Google.

Analysts believe Reddit is still in its early stages of monetization and predict continued growth in the coming quarters, fueled by advancements in ad targeting and measurement tools. This optimism is reflected in the stock price surge, which has climbed roughly 70% since Reddit’s IPO.

Overall, Reddit’s first earnings report paints a bright picture for the company’s future. With a thriving user base, increasing revenue opportunities, and a promising outlook, Reddit appears well-positioned for continued success in the ever-evolving social media landscape.

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