Zomato raises Rs. 760 crore from Tiger Global: Details here
What's the story
In a major step forward, Zomato has raised Rs. 760 crore ($102 million) in funding from US-based investment firm Tiger Global Management. The capital comes as part of the food-tech giant's ongoing Series J round and takes its valuation up to a whopping $3.4 billion, according to estimates from Entrackr. Here is all you need to know about it.
Details
Investment to command 3.01% stake
According to regulatory filings, under the latest deal, Zomato is allotting 25,313 Class J preference shares at an issue price of Rs. 3,09,235/share. This means that post allotment, Tiger Global Management will gain control of a 3.01% stake in the company known for its food-delivery and restaurant discovery platform in India and abroad. It is the fund's first bet in India's food-delivery sector.
Expectation
Round expected to close at $600 million
While Zomato has not issued a statement on the fund-raise, CEO Deepinder Goyal did inform employees of the development and said they expected to close the round at $600 million. "There are more big names joining the round - we estimate that our current round will end up with us at $600 million in the bank very soon," Goyal wrote in an internal letter.
Quote
Temasek, Baillie Gifford, Ant Financial already participated in current round
"We have raised a lot of money, and today, our cash in the bank, around $250 million, is more than ever in our history. Tiger Global, Temasek, Baillie Gifford, and Ant Financial have already participated in our current round," Goyal added in the letter.
IPO
Plan to get listed by next year
Goyal also noted in the letter - reviewed by The Economic Times - that Zomato plans to get listed by mid-2021. "Our finance/legal teams are working hard to take us to IPO sometime in the first half of next year," he said adding that "the value of our business is going up dramatically, all thanks to the hard work and commitment of our team."
Utilization
How the fresh funds will be used?
As for the latest funds, Zomato hasn't detailed a specific plan, but it can be expected that the money will be directed toward taking on Swiggy, its biggest rival. "We have no immediate plans on how to spend this money," Goyal wrote. "We are treating this cash as a 'warchest' for future M&A, and fighting off any mischief or price wars from our competition."