Indian food delivery startup Zomato has raised $ 100 million from Tiger Global and is preparing for the next stage of its journey: an IPO.
Tiger Global funded the capital through its Internet Fund VI investment vehicle, according to a regulatory filing. Info Edge, a major investor in Zomato, confirmed the development Thursday evening, adding that the new round has valued Zomato at $ 3.3 billion by the money.
In an email to employees, Zomato co-founder and CEO Deepinder Goyal said the startup had around $ 250 million in the bank and several other “big name”
“Important note – we have no immediate plans on how to spend this money. We treat this money as a “war chest” for future mergers and acquisitions and fight mischief or price wars among our competitors in various areas of our business, “he added in the TechCrunch-reviewed letter.
Zomato, which acquired Uber’s Indian grocery shipping business earlier this year, competes with Swiggy, which is backed by Prosus Ventures in India. A third vendor, Amazon, has also appeared in the market, although food delivery is currently only offered in select suburbs of Bangalore.
Goyal told employees that the 12-year-old startup is also working on its IPO “sometime in the first half of next year”. (It is unclear how Zomato will achieve this goal, but it will likely seek listing in the US or another market. Under current Indian law, a startup must be viable for at least three years before it can be publicly listed in India – although there was a suggestion to relax that requirement.)
Zomato’s new promise is the result of a significant economic improvement in business over the past few quarters. By the middle of last year, Zomato was losing more than $ 50 million a month to attract and support customers through huge discounts.
The Gurgaon-based company, which like Swiggy has shed hundreds of jobs in the past few months as the coronavirus ruined Indians’ appetites to shop for groceries online, said in July that its losses for that month were less than $ 1 million Dollars.
The startup also faced obstacles in raising new capital. The company started its funding round a year ago, but had only secured $ 50 million a month ago. The startup originally expected to complete this round in January of this year for around $ 600 million.
In an email response to TechCrunch inquiries in April, Goyal attributed the delays to the spread of the coronavirus and announced that the round would be completed by mid-May. He wrote to staff today that Tiger Global, Temasek, Baillie Gifford and Ant Financial had already participated in the current round.