India’s Zomato, a food ordering and delivery startup, has completed its planned fundraising deal with a division of the Singapore government’s Temasek Holdings.
Zomato has now raised $62.4 million from Temasek, the Financial Express of India reported, citing regulatory filings sourced from business intelligence company Tofler.
To date, Zomato has raised just over $900 million, while competitor Swigg has gotten about $1.64 billion from investors, according to the newspaper. “Given how tough the business is, analysts reckon less than a handful of players will survive in the long run,” the Financial Express said.
The delivery business has faced many hurdles this year in India — ranging from the country’s pandemic lockdowns and restaurant closures to regulatory hurdles.
In a new report released last month, Zomato concluded that shutdowns have created a shortage of restaurants, and thus a problem for food delivery. “The number of restaurants offering food delivery are at 70 percent of pre-COVID levels,” Zomato said.
Food delivery volume “may return” to pre-COVID levels in two to three months, the report said, because there remains strong demand.
The report said the “slump in the industry is largely driven by markets being in lockdown, consumers not stepping out due to fear of transmission and restaurants not opening up, even if the city is not in lockdown.”
As a result of the COVID-19 crisis, traditional dining out has been hit even harder than the delivery business. Dining-in traffic is down from 8 percent to 10 percent in various parts of the country.
“Zomato’s dining out transactions in markets like New Zealand, UAE and Portugal are already back to pre-COVID levels,” the report added. “However, recovery in India will be slow and would largely be driven by industry’s ability to build back consumer confidence.”
Meanwhile, in July, Zomato was cut off from Ant Financial, its biggest Chinese investor, amid new Indian regulations. Zomato had only gotten $100 million of the $150 million it had been promised by the Chinese digital payment giant in 2019.
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