Zomato secures $104 mn from Tiger Global, eyes a $600 mn warchest before IPO next year

Food delivery company Zomato has added Rs 760 crore ($104 million at current exchange rates) from Tiger Global Management to its ongoing growth round even as it gears up for a public listing next year. 

The capital came from the alternative investment firm’s Singapore-based affiliate Internet Fund VI, regulatory filings show. 

The deal marks New York-headquartered Tiger Global’s first food-tech investment in India.

Meanwhile, Zomato’s co-founder and CEO Deepinder Goyal said the company is aiming to launch an initial public offering (IPO) as early as mid-next year. 

Goyal, in an email to his employees, said the company has $250 million in the bank from the ongoing round and that it will raise a total of $600 million in the current round before the company hits the public market.

In the email, which has been reviewed by TechCircle, Goyal said Tiger Global, Temasek, Alibaba-backed Ant Group (previously known as Ant Financial) and Edinburgh-based investment management firm Baillie Gifford have already put in the money in the 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,” he wrote in the email. 

The Gurugram-based company had raised $62 million from the Singapore state investor Temasek Holdings last week and $50 million out of $150 million fundraising it announced in January from Ant Group.

"We have no immediate plans on how to spend this money. We are treating this cash as a ‘warchest’ for future M&A, and fighting off any mischief or price wars from our competition in various areas of our business," Goyal said in the email.

He also said the company has facilitated an ESOP sale worth $30 million for its former employees. He advised the current employees to wait until the IPO to monetise their holdings. “Our IPO is around the corner and waiting a little longer will result in significantly more value creation for all of us. Unlike our ex-employees many of whom are doing their own startups and needed urgent liquidity in the middle of a pandemic, we can definitely wait for some more time for a higher upside," he wrote.

A Zomato spokesperson declined to respond to TechCircle’s queries.

The company doubled its year-on-year revenue to $394 million for the financial year 2019-20 from $192 million, even as its losses widened to $293 million from $277 million a year ago. It reported a revenue of $41 million with an EBITDA loss of $12 million during the Covid-19 hit June quarter of FY21, the company announced in a blog post.