After exploring deal with Swiggy, SoftBank may cut large cheque to Zomato

Zomato

SoftBank has been weighing multiple investment opportunities in Indian Internet companies including Policybazaar, Swiggy, and Paytm Mall. After exploring a deal with Swiggy, it has held a discussion with Zomato to invest about $200-400 million.

The Masayoshi Son-led investment firm wants to pick either Swiggy or Zomato to place its bet in Indian foodtech segment. It has been discussing with the Bengaluru-based food delivery firm for pumping $200-250 million over six months.

SoftBank is yet to chose its bet in fledgling food delivery segment. Over the past couple of years, the food-tech space in India is 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.

About three months ago, Zomato had scooped up $200 million round from Alibaba. Acceptance of Zomato in overseas market and potential international expansion are two major drivers for SoftBank interest in the Gurugram-based company.

At present, Zomato operates in 24 countries.

The Deepinder Goyal-led company has hit $100 million in annual revenue run rate in March this year. Importantly, it has recorded about 45 per cent increase in revenue in FY18 to $74 million. At present, it does over 5.5 million deliveries every month.

Importantly, the company has been achieving the growth on the back of an increased number of deliveries and subscription services including Zomato Gold and Treats. Gold lets subscribers avail free drinks and food everytime they dine while Treat offers complimentary dessert on food ordering.

Meanwhile, Swiggy is in advanced talks with DST Global and New York-based hedge fund Coatue Management to secure over $100 million round. The Tencent-backed company is also slated to become the twelfth Indian Unicorn if the ongoing talks get fructified.

After settling the noise in the food-tech sector, the battle for supremacy in Indian foodtech space has shrunk between the two – Zomato and Swiggy. The two-way fight requires a lot of ammunition aka investment.

And, both are eyeing substantial funding to have an upper hand in the capital-intensive food delivery business. Going forward, it would be interesting to observe – whether SoftBank will choose Swiggy or Zomato.

The development was first reported by ET.

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