Wednesday turned out to be a pivotal day for Indian startup community as Alibaba Group led back to back $300 and $200 million rounds in two large startups. After BigBasket, Alibaba-owned entity Alipay has pumped-in $200 million in food tech major Zomato.
With this round, Zomato largest stakeholder Info Edge had diluted $50 million worth equity in the Gurugram-based company. Info Edge holds, on a fully converted and diluted basis, about 45 per cent of Zomato. The investment was done on an estimated valuation of $1.1 billion, reports TOI.
This is the second investment of Alipay in India. Previously, it had invested in Noida-based payment major Paytm. Earlier today, Alibaba led $300 million Series E round in Bengaluru-based BigBasket.
Including these two investments, Alibaba has now invested in 7 Indian startups. The Deepinder Goyal-led company has been talking to Alibaba and its affiliates for this round for over last five months.
Last year proved to be pivotal for food tech Unicorn. Zomato had launched products such as Zomato Gold and also turned profitable in all markets it operates.
The Gurugram-based company had achieved profitability across the 24 countries, where it operates, in September 2017. To take on rival Swiggy, it started a commission-free campaign for about 70 per cent of its restaurant partners.
It also launched subscription-based memberships such as Zomato Treats and Gold. While priced at Rs 249 – Treat lets subscribers avail a free dessert with every meal they order across 16 cities in India, Gold membership is an exclusive dine out and social drinking membership program.
The company’s arch-rival Swiggy had raised $80 million in Series E round led by Naspers in May last year. Interestingly, Alibaba’s rival Tencent is in talks with the Bengaluru based company for leading $200 million fresh round.
Over the past couple of years, the food-tech space in India is currently on a rise. As per a report by RedSeer, India’s online food delivery market comprising of aggregators and cloud kitchens grew at 150 per cent last year.
Of late, food ordering and delivery verticals are getting competitive as Bengaluru-based Swiggy and Zomato are fighting aggressively to woo users as well as restaurant partners. Homegrown ride-hailing major Ola had also entered the food ordering space by acquiring foodpanda.