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Indian startups end dependence on Chinese money

Immediately after the ban, many startups had to reconfigure funding plans and look at different options overnight, but founders acknowledge that the transition has been far smoother than expected.

January 06, 2021 / 04:23 PM IST

Until May 2020, the Indian food-delivery startup Zomato’s fortunes seemed firmly tied to the purse strings of China’s Alibaba Group Holding — its largest investor owning nearly a third of the company via investment arm Ant Financial. Alibaba also had the required heft to lead the unicorn’s future funding rounds. No other single large influential investor was seen on the horizon.

But what a difference a few months can make!

Since May, Zomato has raised $660 million from non-Alibaba investors, including Tiger Global Management, sovereign wealth fund Temasek, Fidelity and Mirae. As Zomato’s fortunes have delinked from that of Alibaba, so have the rest of India’s. The government’s ban on Chinese investments in April last year after the border conflict was expected to jolt the startup ecosystem because of the perceived dependence on Chinese investments by Indian startups.

Eight months on, the reality is starkly  - and pleasantly - different.