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Zomato sets up NBFC, acquires minority stakes in UrbanPiper, AdOnMo

The Gurugram-based company has invested $5 million in UrbanPiper as part of a larger $24 million round for a 19 percent stake and $15 million in Adonmo to acquire 5 percent stake

January 28, 2022 / 09:52 AM IST
Zomato CEO Deepinder Goyal

Zomato CEO Deepinder Goyal

Online food delivery firm Zomato has set up a non banking financial company (NBFC) and invested in two companies - Ad tech firm Adonmo Pvt Ltd and B2B software platform UrbanPiper Technology as part of its larger plan to deploy $1 billion across startups.

Moneycontrol has learnt that the NBFC will allow Zomato to extend credit to its stakeholders such as restaurants, delivery partners as well as customers.

The name of the NBFC is still being finalised.

Meanwhile Zomato has invested $5 million in UrbanPiper as part of a larger $24 million round for a 19 percent stake and $15 million in  Adonmo to acquire 5 percent stake.

Interestingly, early stage investment firm Bace Fund LP in which Zomato founder and chief executive Deepinder Goyal has an investment, invested in AdOnMo in December 2019. It currently owns 13% in the company.

In a stock exchange filing, Zomato has clarified that Goyal's investment of $100, 000 in Bace Fund LP is an "insignificant portion of the fund".

As it happens, Goyal was also an angel investor in Shiprocket, another company where Zomato recently invested. Goyal had later clarified that he exited the company with "zero profit" before Zomato which is now a publicly listed firm could invest.

Goyal had invested $100,000 in Shiprocket early in 2021 while Zomato acquired stake in the company in November.

According to Zomato, 80% of restaurants still use manual processes to process order deliveries leading to delay in order flow and errors in order processing. Founded in 2016, UrbanPiper provides software platform that enables restaurants to integrate with multiple players through a single digital interface. It offers technology to restaurants to enhance their food-delivery capacity.

UrbanPiper currently claims to be processing 12 million orders a month at over 23,000 restaurant locations in the country.

On the other hand, AdOnMo which was also launched in 2016 is an ad-tech company that is taking targeted digital advertising beyond personal devices to outdoor digital screens. Their proprietary technology enables cloud-connected digital screens with contextual and targeted adve1tising capabilities.

"Both UrbanPiper and AdOnMo investments are synergistic to our core business and will help accelerate growth of these companies which will help in filling important gaps in the food ordering and delivery ecosystem in India," Zomato said in a statement.

While Adonmo reported a turnover of Rs  3.27 crore as on March 31, 2021 UrbanPiper's turnover stood at 6.34 crore during the period.

Last year Zomato announced it had plans to deploy $1 billion over the next 1-2 years across startups, with a major focus on the quick commerce space.

So far besides its $75 million investment in Shiprocket, it has invested $50 million in Magicpin and $50 million in Curefit.

It also has 9.3% stake in online grocery delivery firm Blinkit (Grofers) where it has invested $100 million. According to reports, Zomato is also in talks to invest another $500 million in the instant grocery firm.

Moneycontrol recently reported that Zomato as well as rival Swiggy also held talks to acquire younger rival Zepto. According to sources, Zomato approached Zepto with a buyout offer of close to a billion dollars.

Zepto has so far raised around $160 million and sits at a valuation of $570 million.

While the talks did not fructify, the fact that these conversations happened underscores the competitive intensity in the quick commerce space in India.

Last year Zomato raised over $1.25 billion by listing on the public markets, comprising a fresh issue of equity shares worth Rs 9,000 crore and an offer for sale worth Rs 375 crore by existing investor Info Edge.

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Priyanka Sahay
Priyanka Sahay
first published: Jan 28, 2022 08:54 am