Exclusive: Zomato bags $52 Mn from Kora Investments

Foodtech major Zomato has raised $52 million or Rs 380 crore in a new financing tranche from Kora Investments. This is the third tranche of Series J round that began in September with a $62 million infusion from Temasek. 

With the fresh proceeds, the Gurugram-based company has mopped up $216 million in the past two and half months across three tranches.

Zomato has allotted 12,656 Series J5-1 CCPS to raise the consideration from Kora Investments, shows regulatory filings. Post allotment, Kora commands 1.48% stake in the firm.

Zomato is expected to raise more capital in the Series J round from Tiger Global and others. The ongoing round could be the last fundraise for Zomato before its public listing. The company has recently claimed that it is preparing for an IPO in 2021.

According to Fintrackr’s estimate, Zomato has been valued at $3.5 billion or Rs 25,675 crore (post-money). Last month, Tiger Global had invested $102 million or Rs 760 crore in the company. 

Kora’s potential investment in Zomato was first reported by ET. While the report emphasised that Kora would invest $100 million, the New York-based investment firm may inject more capital in the firm in the coming weeks.

It’s worth noting that Zomato had also allotted over 12,000 shares to its employees’ ESOP trust. If subscribed completely, the ESOP scheme will bring in $25 million (Rs 184.2 crore) to the company's coffers.

The funding tranche has come at a time when Zomato has announced that it had reached its pre-Covid peak. According to its chief executive Deepinder Goyal, the company had delivered 92 million orders since March 23. To be precise, India went under two-months prolonged lockdown on the same date.

Online food ordering segment was severely impacted during the lockdown period and Zomato took several tough decisions including layoff and salary cut to cope up with the extraordinary situation. It laid off over 500 employees and scaled down grocery delivery service - Zomato Market.

The fresh capital will help the company to double down on growth and march towards profitability. Recently, Goyal said that the company has no plans on how to spend the raised proceeds. He emphasized that Zomato would raise $600 million in the ongoing round majorly for M&A and fight competition’s price war.

While the company has been claiming to go IPO in the first half of the next year, it’s still far from turning profitable. According to its unaudited financial data, it had a revenue of $394 million in FY20. Its EBITDA losses stood at $293 million in the year ending March 2020.