Food delivery startup and household name Zomato has raised $62 million from Singapore’s state investment arm Temasek, continuing an investment round that should have been closed in January according to the company. This comes after the company managed to show significant improvement in its performance, as it went on to double its revenue to $394 million while losses declined, a very rare occurrence in the Indian food delivery market.
The amount was routed through Temasek’s unit MacRitchie Investments, TechCrunch reports. The news site also reports that this capital was raised as a part of a funding round which was originally expected to close in January. However, as we all know, plans and commitments haven’t really stuck in 2020, and Zomato is no different. During the last few months, the company forayed into new markets, including Grocery, and made some pretty drastic cost cutting measures. Thus, capital is the need of the hour.
Moreover, the round has not really been especially productive, since most of the talks that Zomato has had with investors didn’t really materialize. If that was not enough, one of the company’s biggest backer-Alibaba (or more specifically, the Ant Group) decided to suspend any investments in Indian startups for the next 6 months. This, coming after the group had promised $150 million to the food delivery startup, wasn’t really a good sign. So far, only 1/3rd of this investment has been procured by Zomato. Thus, the company desperately needed this win.
Zomato chief executive Deepinder Goyal said in January that the round should be closed by the end of the month, having raised $600 million altogether. However, that did not materialise. Later in April, he noted to TechCrunch that the round is expected to close in mid-May as it has run into delays, courtesy of coronavirus. However, even that turned out to be untrue. Now, it’s September, and the company still seems to be raising capital.