Gurgaon-headquartered Zomato is in advanced talks to raise fresh funds between $500 million and $1 billion. The online food delivery app's latest attempt to raise fresh capital can be seen as the company's strategy to take on rival Swiggy, which has managed to inject millions of the dollars in the start-up.
According to Economic Times, Zomato is under deliberation with Chinese private equity major Primavera Capital and existing backer Alibaba's payments affiliate Ant Financial. Although it is unclear that how much the new funding will add value to Zomato but as per the last round of fund infusion last year in October, its valuation stood at $2 billion.
"Primavera may invest about $200 million in the upcoming round while the remaining amount could come from Ant Financial. The company is also talking to other investors to syndicate the round," a source said.
It is to be noted that Primavera is an investor in Ant Financial, formerly known as Alipay, as well as the Chinese e-commerce major's local services unit Koubei, a company which was taken over by Alibaba unit, food delivery platform Ele.me.
An executive from Zomato without elaborating on the details of the development said that "there is a new round that we are talking to potential investors (including Ant Financial) for our new fundraising. This will be at a premium to the last round as the company has more than doubled in size since the last round was finalised."
Last year, Swiggy had managed to raise $1 billion in the largest ever funding round in food tech to become the fifth most valuable start-up in the country.
As per the industry estimates, Swiggy registered around 25-28 million order in December 2018. Most of the analyst crowned Swiggy holding the numero uno position in terms of the number of orders per month but Zomato claimed leadership in October 2018 with 21 million orders a month.