Zomato invests $175 Mn cash in Magicpin, Curefit and Shiprocket

Foodtech major Zomato has made three important strategic investments on Wednesday. The Deepinder Goyal-led company will pump around $175 million collectively in Magicpin, Curefit and Shiprocket.

Offline discovery and reward platform Magicpin has raised $60 million in its Series D round in which Zomato will pour in $50 million for about 16% stake. The round also saw participation from existing investors including Lightspeed Venture Partners. With this round, Magicpin’s valuation is just over $312 million now. 

It’s worth mentioning that Magicpin had already brought in Zomato’s co-founder and chief executive Goyal to its board as an independent director. 

Magicpin, which drives revenues for small merchants to popular brands by running promotions on its platform claims 6 million monthly transactions and 170K paying merchants in 50 cities across big brands and local retailers.

Apart from Magicpin, Zomato has confirmed its investment in logistics aggregator Shiprocket and Tata Digital-controlled Curefit. According to the Gurugram-based company, it will invest $100 million which includes $50 million cash investment plus the value of the Fitso business [worth $50 million] to acquire 6.4% in Curefit.

Curefit is now expected to be valued at over $1.5 billion.

Zomato has also signed definitive documents for investing around $75 million in Shiprocket for about 8% stake as part of a larger $185 million round. This roughly valued Shiprocket at over $930 million.

With its $100 million investment in Grofers earlier in August 2021, Zomato has now committed $275 million investment across 4 companies over the past six months. The company further plans to deploy another $1 billion over the next 1-2 years, with a large chunk of it likely to go into the quick-commerce space.

With these investments, Zomato seems to be following the playbook of its early backers and existing stakeholder, InfoEdge (Naukri), which has been an active investor across startups, including Policybazaar which just completed its own IPO earlier this week. However, in a sign of the times, the difference is stark. While InfoEdge invested from its profits, and usually smaller amounts, Zomato is writing out big cheques, even as profits remain elusive for it. 

Zomato reported its adjusted revenue for Q2 FY22 today, which was recorded at $189 million (Rs 1420 crore), a 22.6% growth quarter-over-quarter and 144.9% growth year-on-year (“YoY”). As per the company, the adjusted revenue for H1 FY22 was $344 million (Rs 2,580 crore). Net loss widened to Rs 430 crores from Rs 356 crores in the previous June quarter, and Rs 229 crores in the corresponding quarter last year. 

The company has claimed almost 60 million monthly active users (MAU) on its platform during the quarter.