With this round of financing, Zomato’s valuation has jumped from $3.25 billion to an estimated $3.4 billion, as it closes the gap with rival Swiggy, which was last valued at $3.6 billion.
Swiggy raised $156 million in March quarter of 2020 from Naspers and others.
As Zomato looks to attract new investors to the company, these funds raising efforts might be its last before it hits the public markets.
In an email to employees on Thursday, founder and CEO, Deepinder Goyal has also said that the company will look to go public, by mid-next year, in 2021, according to two individual employees.
Mint has reviewed a copy of the email.
“We have raised a lot of money, and today, our cash in the bank (~$250m) is more than ever in our history. Tiger Global, Temasek, Baillie Gifford and Ant Financial have already participated in our current round, and there are more big names joining the round – we estimate that our current round will end up with us at $600m in the bank very soon," Deepinder Goyal told employees.
In addition to this, Zomato will be using this funding, as cash reserves to fight price competition in the market, as well as look at potential acquisitions in the space, which will boost its food delivery capabilities.
“The best part is that our burn rate is very low, and our market share is accelerating in all regions […] we have no immediate plans on how to spend this money. We are treating this cash as a ‘war-chest’ for future M&A, and fighting off any mischief or price wars from our competition in various areas of our business," added Goyal in his memo.
This investment from Tiger Global comes a week after the Gurugram-based foodtech major closed $62 million from MacRitchie Investments Pte. Ltd., a unit of Singapore’s state investment arm Temasek Holdings.
The company in March raised $5 million from Pacific Horizon Investment Trust, which is managed by UK-based Baillie Gifford & Co. Ltd.
Earlier in July, Zomato said that its revenues doubled to $394 million, although it recorded a loss of $293 million, for the fiscal year 2019-20. In FY19, the food aggregator unicorn reported a revenue of $192 million and a loss of $277 million.
The covid-19 induced pandemic has severely affected the food aggregator business with delivery volumes averaging around 50% for the overall industry, at present.
In its latest report, Zomato estimated that business for the food delivery industry will come back to pre-covid levels in the next 2-3 months, with 70% of restaurants on its platform delivering food at present.