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The restaurant aggregator Zomato to gear up for IPO in 2021 with the latest fundraising plans

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Zomato, to gear up for IPO in 2021
Zomato, to gear up for IPO in 2021 , Photo by Rahul Chakraborty on Unsplash

Zomato, the food delivery startup that provides user reviews and restaurants’ menus, is prepping up for an IPO in 2021.

Since October 2020, Zomato is adding global investors to its Series J funding round as it would go public by the middle of 2021. All the investments in the current round come by valuing the company at $3 billion.

These fundraising plans of Zomato were first scheduled in early 2020; however, it was delayed due to pandemic.

Besides the major roadblock of lockdown, the anti-China sentiments also disrupted its plans.

The new FDI rules severely affected the flow of Chinese capital. And the new direction no longer allows the automatic FDI route and seeks government approval for investment clearance.

Ant Financial, the major shareholder in Zomato, couldn’t wholly participate in the investment rounds due to the new overgrowing restrictions.

However, the ever-growing demand for home food deliveries has spruced the demand and customers Zomato caters to.

Hence in October, it resumed with plans of raising $600 million in totality. After capping the primary funding, Zomato will then find secondary sellers at the same price.

By now, two tranches of funding have been completed, with a third one on its way. On November 10, 2021, analysts reported that Fidelity and D1 capital are willing to inject capital in Zomato after spiking demand for online food services.

The investment amount under speculation is $100 million as a part of its Series J funding.

As reported by Zomato’s top officials, investors will be issued convertible cumulative preference shares. Also, Zomato has appointed Kotak Mahindra band as its merchant banker Indus Law as the legal advisor or its IPO plans.

Tranches of the funding round

The first portion of funds was raised in October 2020 from Ant financial, Ballie Gifford, Temasek, Tiger Global, and Kora, amounting to $265 million.

Ant Financial, the Alibaba payment app, had earlier agreed to contribute $150 million but continued to stand at $100 million spending due to India-China border tensions post-pandemic.

The second tranche saw Ballie Gifford, Mirae Asset Fund Steadview Capital, Bowwave, and Luxor with an investment of $145 million. This fresh capital pump has been finalized and is now under its completion stage.

The recent news in circulation expects the third round from Fidelity and D1 capital with an expected $100 million infusion. Both of them are research management and hedge fund based companies.

Zomato is willing to add energy to its cash reserves with these recent developments and brace itself up for IPO 2021.

After Ant Group and Biocon, Zomato is another company moving for capital infusion in a pandemic.
All in all, the aspirations of Zomato to pull off an IPO seem promising for developing a global reach and carving its place as a startup.

An avid learner having infatuation for numbers and finance. Also, an individual with unfiltered opinions who likes to mix the metrics of both professionalism and creativity.

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