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Zomato to raise $62.5 million from various investors

Zomato delivery guy fetching a order

Zomato is one of those companies which has been around for a long time. The company has managed to exist in all the circumstances and changed a lot of faces. It started out as a restaurant finder and is still doing that but it has majorly entered the food delivery business and is not doing well on that front. The company has had to go through a lot of scandals and controversies. There were a lot of people biting into the company, however, it has stopped and the company seems to be back on track.

The other thing Zomato needs to be wary off is Swiggy acquiring UberEats. There are strong rumors and the deal could be announced anytime this month. This could be a huge setback for Zomato as Swiggy is managing to win all the races at this moment. At the end of the last year, Swiggy bulked up by $1 billion, Zomato promised to raise a similar number but couldn’t. Now, the company is acquiring the third best food delivery company in India, UberEats. This move could totally put Swiggy in the driving seat.

The decade-old company, Zomato, is in the news constantly for a lot of things. The reason for that is the company was operating without a food safety license, to add to that one of its delivery guys was eating food from orders. That is the reason the company had to go through a lot of trouble. However, the company is trying to work towards food safety and offer a better food experience to its users. It has also de-listed a few companies from its platform because of hygiene guidelines not maintained.

In the wake of all this, the company took another decision. It has moved one of its execs from a position of Chief Operating Officer to Co-founder. Gaurav Gupta is that employee who has been moved up to a position of co-founder. He has been with the company for four years now and was promoted to the position of Chief Operating officer just last year. Based on his performances, he has been awarded the position of the same.

That said, there have been such instances before. Flipkart also announced, Tiger Global exec Kalyan Krishnamurthy as its Chief Executive Officer. There have been such instances where people have been moved up to better positions.

Moving on, Zomato is looking to increase its inventory by adding $62.5 million. This investment will come from different investors. Shunwei Capital is going to but 0.23%, Saturn Shine is poised to by 0.36% and Delivery Hero, from Germany, is going to buy 2% stake in the company. All of these investors will accumulate to 62.5 million which will help the company strengthen its position in the market.

Interestingly, Delivery Hero, which is going to invest in Zomato is backed by Naspers. Naspers is a South African media giant which led the $1 billion funding round in Swiggy. This tells us how lucrative the food tech market of India is. There are companies from all over the world posting winning bets in this market.

-Unmesh Phule

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