Zomato launches Wings to help restaurants raise funds
2 min read . Updated: 01 Dec 2021, 06:25 AM IST
PremiumIt plans to facilitate fundraising for its partner restaurants by connecting them with investors
BENGALURU : Close on the heels of launching a $1 billion corpus to invest in startups, food delivery company Zomato on Tuesday unveiled Zomato Wings, a platform to help restaurants raise investments.
Zomato said it would facilitate fundraising for its partner restaurants by helping them position their story and metrics and connecting them with investors. Zomato itself, though, will not invest in the restaurant brands.
“We are excited to announce the launch of Zomato Wings, a platform to connect investors with restaurants. Just like ambitious restaurant entrepreneurs look for investors, investors also hunt for brands and teams that have the potential to become the next big chain," Zomato founder and chief executive Deepinder Goyal wrote in a company blog.
“By curating a set of restaurants and cloud kitchens that could become rocketships if fuelled with equity capital, we hope to build the go-to platform for venture capital firms, angel investors, family offices, etc. that are looking to make private investments in restaurants and cloud kitchens," Goyal added.
In April, rival Swiggy revamped its Jumpstart programme for restaurant partners, helping them raise business loans and improve cash flows through bi-weekly payments and avail of other benefits.
Over the past months, several other startups, including BharatPe and Unacademy, have sharpened their focus on helping their partners and launched new equity stock ownership programmes to deepen brand loyalty.
Zomato’s new platform aligns with its aim to build an ecosystem of industry partners. “As we partner with more investors by connecting them with enterprising restaurants, more budding restaurants would use this platform for fundraising, and the platform’s flywheel would create a win-win for restaurants and investors, and by extension, for Zomato," Goyal wrote.
During its recent earnings announcement for the quarter ended 30 September, Zomato announced plans to add other core businesses apart from its food delivery business over 3-5 years. It had then said that it would be acquiring or investing in complementary businesses to add these new hyperlocal use cases instead of building them in-house.
In line with this strategy, Zomato announced an investment of $1 billion in startups over the next two years, focusing on the hyperlocal and quick commerce space. The planned corpus is in addition to the $275 million Zomato spent through investments across four companies in the past six months, including logistics player Shiprocket, local discovery platform Magicpin, fitness platform Curefit and e-grocery major Grofers.
The bets came on the back of Zomato shutting down its e-grocery and nutraceutical experiments, as it wanted to continue its operational focus on the food delivery business. “We want to take an investment route to build these businesses instead of building them in-house. This strategy is inspired by the likes of Alibaba and Tencent, where they invested behind the ecosystem at large, creating multiple merger and acquisition options for themselves," Goyal said recently.
Shares of Zomato rose 2.45% to close at ₹153.35 on the BSE on Tuesday.
