Zomato is in talks with Chinese payments giant Ant Financial to lead a $600 million funding round for the delivery company, according to a report by the Financial Times.
Ant has its hands in other Indian companies, like Paytm and Paytm Mall. Zomato could help Ant have a service similar to Alipay in China, where users can do things like call a taxi, order food, pa bills and invest, all from a single place.
“Zomato is working very closely with Paytm, because one of the best use cases for payments is food,” a person with direct knowledge of the situation told the Times.
The 11-year-old Zomato serves 10,000 cities in 24 countries. Upwards of 100 million people use the service every month. The move shows the desire of Chinese tech companies to get a piece of India’s lucrative and growing eCommerce market.
Alibaba’s rival Tencent is also trying to build a presence in India. The B2B eCommerce platform Udaan recently raised $585 million from a group that included a company based in Shenzhen. Tencent, however, has been pursuing smaller partnerships after it tried unsuccessfully to purchase Flipkart for $8 billion.
The Indian government has been careful about allowing foreign companies to purchase large amounts of native companies. “You need to be cautious,” said one investor in Udaan. “You always need to have a sizeable Indian ownership to avoid blowback from the government.”
The Tencent/Ant rivalry also positions two huge venture capital firms against each other: Sequoia Capital has invested in Zomato, and Hillhouse Capital is part of the Tencent deal involving Udaan.
Revenue at Zomato this week was reported at $205 million for the first half of the 2020 financial year, an increase of 225 percent from the same time last year. The company also reported that its losses went down 40 percent from March to September.