Zomato raises $52 million from US-based Kora Investments

Zomato has raised a fresh Rs 379.97 crore ($51.78 million) from US-based Kora Investments, according to the company’s regulatory filings sourced from business intelligence platform Tofler. The funding which is part of the company’s ongoing series J financing round marks the firm’s third fund raise in less than two months.

Founder & CEO Deepinder Goyal plans to file for an IPO (initial public offering) sometime in the first half of 2021.

The food delivery sector has seen a quick turnaround, with order volumes having already reached pre-Covid peaks as homebound customers ordered food online and celebrations shifted indoors.

So far this year, Zomato has raised about $273.22 million and more investors are expected to join the firm’s ongoing financing round. The total size of the investment round is pegged at about $600 million. Bulk of the capital will be used to fund “future M&A, and fighting off any mischief or price wars from our competition in various areas of our business,” Goyal had said in an internal mail to employees earlier.

The sector is expected to grow at around 15%-25% month-on-month for the foreseeable future, Goyal said earlier this week. “A number of cities are now at over 120% of pre-Covid peaks,” Goyal said in a tweet.

Last month, Zomato raised $62.44 million from Temasek and another $104 million from Tiger Global.

Given how tough the business is, analysts reckon less than a handful of players will survive.

HSBC analysts estimate India’s food delivery could be valued at about $30 billion in the long term in a blue-sky scenario. Delivery volumes, they point out, are currently less than 1/20th of volumes in mainland China volumes.