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Zomato rumored to raise $1 billion to match Swiggy’s recent funding round

Zomato app starting as screenshot is taken

Zomato is one of the leading food delivery and restaurant finder applications in the country. The company is now a decade old and is bigger than ever before. It has been on a hiring spree recently and is going deeper into the country. Zomato has found itself in a tussle with Swiggy since the former entered the food-delivery market.

Swiggy is totally concentrated on its food-delivery business while Zomato is a lot of other things and is older than Swiggy. Zomato is also worth more than Swiggy but the fight will always be on as the food-delivery business is larger than all of Zomato’s businesses combined. Swiggy is already ahead of Zomato in deliveries per month and its reach in tier 2 and 3 cities. However, that is not going to phase Zomato in any way as it is on its track to grow even further.

However, that growth was hindered to a great extent a month or two ago. Zomato found itself in deep trouble when a video of one of its delivery executives was released online. The delivery guy was eating from the food packages he was supposed to deliver. It was a huge blow to Zomato as it takes its packaging and delivery very seriously. Anyhow, Zomato sorted the issue out almost immediately as it fired the culprit the very next day.

That said, Swiggy took a huge step forward when the Zomato was clearing up the mess its delivery boy created. Swiggy earned a $1 billion investment which was led by a South African giant Naspers and also from a Chinese giant Tencent. This was a huge blow to Zomato as it had not expected Swiggy to get this kind of an investment. Zomato was expecting a $600 investment into the firm but not a billion dollar bulk up.

This has urged Zomato to work their economics up and grow even further. Swiggy’s funding round has catalyzed Zomato’s funding round. As the rumors are cooking up the tech-kitchen that Zomato is looking to bring in a huge billion dollar investment of its own. It is rumored that a fresh funding round ranging from anywhere between $500 million to $ 1 billion will be held. The frontrunner in this investment round will be Chinese private equity major Primavera Capital and Alibaba’s Ant Financial.

According to the birds chirping around, $200 million will come from Primavera Capital and the rest of the remaining $800 million will come from Ant Financial. In 2018, Zomato raised a total for $410 million from a couple of Chinese investors. $200 million and $210 million were invested by Ant Financial and Alipay respectively. This investment helped Zomato expand to 100 different cities and reach 21 million deliveries in a month. It garnered almost 2.4 million users last year and this is a feat which is huge for Zomato.

The food-delivery business right now stands at $19 billion and Zomato is now acting swiftly to work wonders and overtake Swiggy. However, that will be a task of the highest difficulty but Zomato is up for the challenge. That said, UberEats and Foodpanda are also making some noise and will have plans to enter this two-horse race.

– Unmesh Phule

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