Food delivery firm Zomato has raised $102.5 million led by Tiger Global Management, at a time when the sector has taken a beating from the pandemic, and will give Zomato ammunition to grow.
Zomato has raised Rs 760 crore, valuing it at $3.4 billion, according to regulatory filings. Moneycontrol first reported on August 9 that Tiger is in talks to back Zomato.
This is in addition to the $62 million it raised from sovereign fund Temasek earlier in September.Moneycontrol had first reported the story
on August 9.
The deal also finally gives Tiger- one of India’s most prolific startup investors- a stake in one of its biggest sectors. Tiger had not invested in Zomato, its rival Swiggy, or anyone else in the sector so far.
For FY20, Zomato’s revenue grew 105 percent to $394 million, while its losses climbed marginally to $293 million, compared to $277 million in FY19.
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Zomato’s FY21 numbers will show the full extent of the coronavirus pandemic’s impact- when it did not have orders for months, it had to lay off 13% of its workforce, and revenue still hasn’t bounced back to pre-pandemic levels.
However, Zomato’s unit economics have improved during this time- it has cut back on discounts, and order values have gone up, potentially helping it in the long run,
For the first quarter of FY21, Zomato had $40 million in revenue and $12 million in losses.
“In the last few quarters, we have fast-tracked our efforts towards making our business profitable and driving efficiency into our spends. While COVID-19 has impacted the size of our business, it has accelerated our journey to profitability,” Deepinder Goyal said in a July 10 blog post published by the Gurugram-based company.