Zomato to raise $200 Mn fund by selling UAE biz to Delivery Hero

In today’s world Zomato and Swiggy are the most known names in the Indian food tech space. They are intrigued in the ‘who has more orders’ war for quite a long time now costing millions in way of discounts and cashbacks.

As Swiggy has raised $1.3 billion across three rounds recently, Zomato is also looking to picking up funds to continue throwing away money on its ‘No Cooking’ months. It is also looking to raise money by selling parts of its business.

In UAE, Zomato and Delivery Hero account for possessing a market share of over 35-40 per cent together. If the deal goes through, the Berlin-based company will have a significant market share for itself. An interesting fact in this transaction is that Ola’s foodpanda was Delivery Hero’s India business, which is sold to Ola for 1 per cent stake in ANI Technologies. Now, the same company is set to acquire foodpanda’s competitor Zomato’s business in UAE.

As 28 per cent equity owner, Info Edge has decided to keep out of this cash burn battle and not invest in the new round. Zomato is also looking to onboard a new investor. Goldman Sachs has already been appointed with a mandate to solidify the fundraising process.

There are over 40 million deliveries taking place every month in the food tech space. And the two rivals together are expected to be spending $30-40 million in discounts to restaurants and delivery fleet for each of the months setting the funding requirements high.

Now, it is to be seen how the latest attempts at collecting money for Zomato go through.