Investments

Zomato To Raise Cash With Singapore Investment

Zomato app

Zomato, the food-ordering and delivery startup in India, is completing a fundraising deal with a division of the Singapore government’s Temasek Holdings.

LiveMint.com reported Zomato plans to sell about 15,200 shares to MacRitchie Investments, according to filings with the Ministry Of Corporate Affairs, India’s equivalent of the U.S. Securities and Exchange Commission.

If the deal is completed, it could provide $60 million into the company based on its valuation of its January fundraising event, the report said.

In March, Zomato received $5 million from Pacific Horizon Investment Trust, a publicly-traded investment trust listed on the London Stock Exchange and managed by Baillie Gifford & Co Limited, the Edinburgh-based investment management partnership.

In July, Zomato was cut off from Ant Financial, its biggest Chinese investor, amid new Indian regulations. Zomato failed to secure $100 million of the $150 million it received in investments from the Chinese digital payment giant in 2019.

Last month, the privately-held company reported revenues for the fiscal year that ended March 31 increased to $394 million, up from $192 million in fiscal 2019, the company reported. At the same time, the company reported, annual net loss grew to $293 million from $277 million.

“Right after the rise of COVID-19 cases in India towards the end of March, our food delivery gross merchandise value (GMV) hit its lowest point in two years,” Deepinder Goyal, founder and CEO of Zomato, said while announcing the results. “GMV was 80 percent down in the last week of March, compared to our peak pre-COVID-19 week (in mid-February).”

Zomato has scaled back Zomato Market, its online grocery platform which debuted in April as the coronavirus emerged.

In a report published last week, Zomato revealed despite strong demand for food delivery in India due to coronavirus-related dining restrictions, transactions fell below pre-pandemic levels because many restaurants were closed.

“The number of restaurants offering food delivery are at 70 percent of pre-COVID levels. Out of this, about 5 percent [of] restaurants did not offer food delivery services pre-COVID. Most of these are dining out-centric places which have shown agility to pivot to food delivery,” Zomato’s researchers wrote.

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