Zomato valued at $3.3 bn in ongoing round, Info Edge stake down to 22.2%

Food tech unicorn Zomato is now valued at $3.3 billion post-money after it announced raising an equity round led by Tiger Global Management. 

In a stock exchange filing on Thursday, early investor Info Edge said its shareholding in Zomato has come down to 22.2%, on a fully converted and diluted basis. 

Info Edge held a 25.13% stake in Zomato in January. 

The filing confirmed that Zomato had raised $100 million from Tiger Global and $60 million from returning investor Temasek Holdings.

The investment round brings Zomato on par with close rival Bengaluru-headquartered Swiggy, which was valued at around $3.6 billion in February when it raised $112.5 million from returning investor, Prosus Ventures. 

Zomato’s current valuation is the same as it was in January when returning investor Ant Group invested $50 million of a $150 million commitment in the company. The balance $100 million is yet to be credited into Zomato due to restrictions on Chinese FDI (foreign direct investment) in Indian companies which was enforced in August. 

In its recent earnings call to discuss financial results for Q1 2020, Info Edge stated that Zomato had enough investor interest and will need more money. Founder of Info Edge Sanjeev Bhikhchandani also said that Zomato might see an increase in monthly burn rate as the company sets about reinstating salaries and spends on the brand. 

Previously, Info Edge also hinted at a secondary sale of its stakes in Zomato if it reaches breakeven which might be a few months away. The business suffered a setback due to the Covid-19 related lockdown and is still on path to recovery in terms of delivery volumes. 

In an e-mail to his employees, Zomato co-founder Deepinder Goyal said that the company will raise $600 million in the ongoing round, ahead of an IPO by mid-next year.