Zomato To Raise $ 200 Million From Alibaba And Alipay

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 –