According to people with knowledge of the situation, Zomato has been unsuccessful at securing $100 million of the $150 million it received in investments from the Chinese digital payments giant last year.
The reason is an April announcement by the Indian government that it would begin blocking what it described as “opportunistic takeovers” by requiring official approval for investments from any country that shares a border with India.
According to The Financial Times, most of the missing $100 million is currently going through the government approval process, with the company confident it won't have an issue, according to sources familiar with the matter speaking to The Times.
Ant Financial has almost 25 percent stake in Zomato, having invested a total of almost $560 million in the company. And in January, Zomato agreed to buy Uber's India food delivery business.
Zomato has been engaged in competition with another food start-up, Swiggy, another company backed by Chinese interests — in this case, by Tencent and Meituan-Dianping, the largest food delivery group in China.
But the investors' business dealings have been undercut in recent times by political concerns, with an anti-China sentiment sweeping India, particularly following the clash between the two countries' soldiers in the Himalayas. As such, Chinese companies and Indian startups relying on their investments have all been impacted. Recently, Zomato employees in Kolkata made the news for burning company T-shirts protesting Chinese encroachment on their business.
The hold-up in finances, The Times writes, hasn't held up Zomato's business plans, and the company is still looking forward to an initial public offering (IPO) next year.
The $150 million from Ant Financial last year was part of a larger $500 million round, the intent of which Zomato did not specifically disclose. The company said it wanted to be profitable by the end of 2020.