Alibaba is reportedly looking for investing in Zomato. If the investment goes smooth, they might want to claim a stake in the company.
A source told ET, “There are synergies between the two players in the international markets, especially Southeast Asia where Alibaba is building a strong presence. But the deal is not finalized as there is no term sheet yet.”
Zomato was founded by Pankaj Chaddah and Deepinder Goyal in 2008. By far the company has raised about $223 Mn funding.
The company’s bumpy ride began in 2016. In May, it rolled back operations from 9 countries out of 23. Around the same time, investor HSBC Securities and Indian Capital Markets marked down the company’s valuation by half to around $500 Mn.
The Indian foodtech giant witnessed a 34% decrease in its total losses for 2016-2017. In the annual report for FY17, Zomato reported an 80% surge in revenue to around $60 Mn. The restaurant discovery and food delivery platform witnessed an 81% drop in the annual operating burn for FY17 at $12 Mn compared to the $64 Mn in FY16.
In August 2017, the foodtech unicorn said that it on-boarded 21k subscribers for its paid Zomato Treats service. The company also claims that its cost of acquisition is negligible. In a post on the company blog, Mukund Kulashekaran, VP Global Growth/Business Head of Online Ordering said, “We are still not spending money to acquire users and our listings business is still feeding the baby.”
recent report by RedSeer Consulting claims that online food delivery grew at a pace of around 150% to reach $300 Mn in 2016. And the online food delivery players handled, on an average, 160K orders in a day with an average order value of $5.
With the funding from Alibaba and Ant Financial, the Indian foodtech startup, Zomato will look to expand in international markets. The backing by the Chinese ecommerce giant will also cement the position of the unicorn in the Indian foodtech space.