Amid Covid, Zomato closes massive $660 million funding round; valuation nears $4 billion

Food delivery company Zomato has closed a $660 million investment round from marquee investors and is currently in the process of closing a $140 million secondary transaction, Founder and CEO Deepinder Goyal said in a Twitter thread. The round has valued Swiggy’s arch-rival at a post-money valuation of $3.9 billion that saw 10 new investors coming on-board as the company prepares itself for the IPO in the first half of 2021. “This list includes Tiger Global, Kora, Luxor, Fidelity (FMR), D1 Capital, Baillie Gifford, Mirae, and Steadview,” Goyal said.

Goyal, at a public event in December last year, had said that the company is going to raise $500-600 million. Since then, the company has raised investments at regular intervals in its Series J round of funding. The company was last valued at $3.6 billion following $195 million funding in November, according to a regulatory filing by one of its early investors and Naukri.com’s parent Info Edge. On the other hand, Swiggy, which last raised $43 million in April 2020, was reportedly valued at $3.5 billion.

Moreover, as part of the secondary deal, the company has already provided liquidity worth $30 million to its ex-employees, Goyal further tweeted. “I am grateful for their contribution in building @Zomato and am glad that we created some wealth for these super amazing people. A number of these ex-Zomans are busy working on their own startups and will not need to raise seed capital from external investors,” Goyal added. Amid Covid, as the entire economy faced headwinds, the foodtech sector saw a significant impact with negligible orders and fewer operational restaurants. The company had laid off nearly 600 employees – 13 per cent of its workforce due to Covid impact, according to an internal note by Goyal written to employees in May.

Also read: Zomato-backer Info Edge gets more money to invest in startups; Singapore’s Temasek backs Rs 750 cr fund

However, the food delivery segment has recovered significantly. According to Goyal, December 2020 is likely to witness the highest ever gross merchandise value (GMV) in Zomato’s history. The company is clocking around 25 per cent higher GMV than its previous peaks in February 2020 as the “tailwinds for food delivery businesses are clearly visible, and we believe that the growth of the sector will accelerate post vaccine.” Meanwhile, Swiggy had reported in October that its pan India food delivery had recovered to around 80-85 per cent of pre-Covid order in value while in “many markets” it has returned to 95 per cent, and “some even over 100%.”