Zomato to raise $146 mn as it preps for IPO in 2021

Food-tech unicorn Zomato, which is gearing up for a public listing in the first half of 2021, is set to raise a little more than $146.5 million as part of its ongoing Series J round of funding.

The Gurugram-based startup has raised an additional ₹37.9 crore (about $5.1 million) in October from Pacific Horizon Investment Trust, which is managed by UK’s Baillie Gifford and Co. Ltd, as part of the Series J funding, regulatory filings sourced from business intelligence platform Tofler showed.

Pacific Horizon Investment Trust had previously invested $5 million in Zomato in March this year.

The ongoing round will see Mirae Asset-Naver Asia Growth Fund, Steadview Capital, hedge-fund Luxor Capital Partners, Lugard Road Capital and ASP India LP pump in the fresh capital over the coming weeks.

Zomato is looking to issue 34,873 class J7 compulsorily convertible cumulative preference shares (CCPS) to the investors, at an expected price of ₹300,235 per share, garnering close to ₹1,047 crore ($141 million), the filings showed.

In a bid to bolster its cash reserves, Zomato has been on a fundraising spree over the past months, garnering a little more than $270 million so far in 2020 from key investors such as Tiger Global Management, Temasek, through MacRitchie Investments, and Ant Financial.

Zomato’s latest fundraising plans was first reported by news portal Entrackr.

Mint reported on Thursday that Zomato had appointed Kotak Mahindra Bank as a merchant banker and Cyril Amarchand Mangaldas and Indus Law as legal advisors for the initial public offering (IPO).

If the startup pulls off the IPO, it will join the likes of MakeMyTrip, which listed on the Nasdaq in 2010, and Zomato’s single-largest shareholder Info Edge India Ltd, which listed on the BSE in 2006.

In October, Zomato had made changes to its leadership team, elevating Akshant Goyal as the chief financial officer (CFO), as it continued to give its employees exits through secondary share sale transactions. Akriti Chopra, the former CFO who was responsible for fundraising, will now oversee people development programmes.

Zomato’s current valuation is $3.3 billion, as per the last funding round in October, which saw Kora Investments pumping in close to $52 million.

As Zomato looks to go public, losses for the firm haven’t seen any significant improvement.

Although Zomato doubled its revenue to $394 million in 2019-20, losses increased to $293 million from $277 million in 2018-19. Analysts, however, said the losses would not impact Zomato’s IPO aspirations.

Source: livemint.com