Alibaba's Ant Financial pumps $200 million into Zomato, takes valuation to $1.1 billion

The Zomato deal, an amalgam of primary and secondary share transactions, will see Alibaba group company Ant Financial investing $150 million as primary capital.

The foodtech battle just got a little more interesting. Delhi-NCR-based unicorn foodtech startup Zomato has raised $200 million from Ant Small and Micro Financial Services group. With the fund-raising, the valuation of the company has risen to $1.1 billion. The $200 million funding includes a secondary share sale of $50 million by Info Edge to Ant Financial.

According to media reports, the secondary sale dilutes parent Info Edge’s stake in Zomato to 30.91 percent.

Ant Financial is bullish on the hyperlocal businesses, and is thus looking closely at Zomato, the reports said. The Alibaba group company believes that India can build a hyperlocal platform similar to China’s hyperlocal giant Meituan Dianping. Before the share sale, Info Edge owned about 44.74 percent stake in Zomato.

“The expected date of completion of sale/disposal is on or before April 15, 2018,” Info Edge notified BSE.

“Post the aforesaid fund raise by Zomato and sale/transfer of shareholding by the company/ NSIL (Naukri) as mentioned above, Info Edge’s aggregate shareholding in Zomato shall be about 30.91 percent on a fully converted and diluted basis,” it added.

Ant Financial has also tied up with US-based Yelp. Over the last three years, Swiggy acquired a delivery fleet of over 20,000 people. This, the team believes, has given it an edge over competitors. Last month, Swiggy launched Swiggy Capital Assist in partnership with Indifi Technologies. The programme will give collateral-free loans to restaurant partners. The rate of interest and other details remain undisclosed.

So far this year, $300 million has been invested in the foodtech sector. The overall food market in India is believed to be worth $193 billion, and poised to cross $540 billion in the next three years.

According to reports, Zomato has been in the market for funds since 2017, and raised close to $225 million in funding during the year. Another food startup Swiggy, survived the 2016 foodtech bloodbath due to its strong operations, even as others in the space like TinyOwl shut shop.

Swiggy claims it serviced four million delivery orders in July, and added it has seen healthy growth since then. Post its Series E funding round in June, the startup said it was looking to double its headcount, increase investments in core engineering, automation, data sciences, machine learning, and personalisation.