Zomato grabs $210 Mn from Alipay, Ant Financial gains majority stake

Shubham Kumar Shubham Kumar
Oct 16, 2018 1 min read
Zomato grabs $210 Mn from Alipay, Ant Financial gains majority stake

Chinese e-tailing behemoth, Alibaba is aggressively vying to expand its presence across Indiaโ€™s foodtech space after capital infusion into the foodtech unicorn โ€“ Zomato. The home-grown foodtech major has signed a definitive agreement with Alibaba-owned digital financial service platform - Alipay Singapore Pte Ltd. to undertake a primary fundraise of around $210 million. Following the latest agreement, Alibaba's payment affiliate Ant Financial invested in the food delivery platform.

Post fund infusion from Alipay this week, the companyโ€™s earliest backer - Info Edgeโ€™s share-holding reduced from 30.91% to 27.68% on a fully converted and diluted basis and is no longer its largest shareholder. Alibabaโ€™s stake in it is expected to soar over 28 per cent. Before the deal went through, Ant Financial held 20% stake in the foodtech firm. In September, Ant Financial procured the rights to become the largest shareholder of the Gurugram-based firm.

Alipay, the existing investor of Zomato, has infused $150 million as primary capital in the foodtech firm earlier this year. According to reports, Zomato has generated revenues of $74 million in the FY18 without divulging the profit or loss incurred.

Last month, zomato acquired Bengaluru-based startup โ€“ TongueStun in a cash and stock deal for $18 million. Last year, Zomato acquired logistic startup Runnr, to enhance its delivery capabilities.

Swiggy and Zomato, the foodtech majors are in a fierce battle with Chinese giants backing up both. Its primary competitor, Swiggy is reportedly in talks with Alibabaโ€™s rival and WeChat app owner Tencent to scale up and strengthen its operations with a $500-700 million deal. Other competitors who have made foray into this space are - Ola acquired Foodpanda, and Uberโ€™s food delivery arm, UberEats.

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