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Zomato Announces $150 Million in Funding From Ant Financial Services, Valuing It at Over $1 Billion

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Zomato Announces $150 Million in Funding From Ant Financial Services, Valuing It at Over $1 Billion
Highlights
  • A unit of Alibaba Group Holding is investing
  • Ant Financial Services Group is also buying shares
  • Zomato to use funds to improve products, technology

A unit of China's Alibaba Group Holding has invested $150 million (roughly Rs. 977 crores) in Zomato, valuing the Indian food search and delivery service at more than $1 billion (roughly Rs. 6,500 crores), the companies said on Thursday.

Ant Financial Services Group, Alibaba's payment affiliate, is also buying $50 million (roughly Rs. 325 crores) worth of shares in secondary purchases as part of the transaction taking its total investment in the company to $200 million (roughly Rs. 1,300 crores).

Zomato, which provides services across 24 countries, said it will use the funds to improve products and technology. The company said it will look to offer more convenient and seamless payment options to its users in partnership with Ant and Ant's strategic mobile wallet partners.

Deepinder Goyal, Founder and CEO of Zomato, said, "At Zomato, our long-term vision is 'better food for more people'. This partnership with Ant will significantly accelerate our journey towards our vision. We believe that Ant is the right strategic partner for our business at this stage and we can gain tremendously by learning from and leveraging their global network, scale and technology."

"Ant Financial is pleased to be part of Zomato's growth journey and hopes to contribute to its future development into a full-fledged food services platform. We plan to work closely with Zomato and share Ant's business and technology know-how in building lifestyle apps. Through our strategic mobile wallet partners in India and across Southeast Asia, we see immense opportunities to collaborate with Zomato to bring a much-improved user experience around dining, food ordering and delivery", said Douglas Feagin, President of Ant Financial.

Earlier this month, rival food delivery app Swiggy announced Series F funding from existing investors Naspers, and others including new investors Meituan Dianping, a Chinese group buying website headquartered in Beijing. The company announced it has raised $100 million, roughly Rs. 642 crores.

In its announcement, Swiggy said that it will use the funding to introduce "a host of unique products and services." Swiggy had also said it will also make investments in its New Supply business line - the first launch of this line was Swiggy Access through which the company offered cloud kitchens for restaurant partners.

The new capital will be used for further expansion, and it will also invest in areas of "data-driven self-learning systems that leverage machine learning and artificial intelligence." That buzzword soup suggests that Swiggy wants to improve its recommendations and delivery time predictions further, in order to drive the speed and volume of deliveries.

Written with inputs from Reuters

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