Zomato is currently the leader among Swiggy and Amazon
Indian food delivery startup Zomato is now worth $5.4 billion as a result of a $250 million investment.
The money came from contributions by Kora ($115 million), Fidelity ($55 million), Tiger Global ($50 million), Bow Wave ($20 million), and Dragoneer ($10 million).
Each company put their respective capitals into Info Edge, a Gurgaon-based startup and a Zomato investor.
Info Edge has an 18.4% stake in the Indian startup.
This new investment gives Zomato a post-money valuation of $5.4 billion.
This is a significant increase as, according to Info Edge, Zomato were worth $3.9 billion in December 2020.
For much of 2020, raising money was a struggle for Zomato.
However, this new investment shows how investors still have confidence in the startup.
Prosus Ventures-backed Swiggy is a strong Indian competitor of Zomato, and is valued at around $3.6 million.
Combined, they work with over 440,000 delivery partners and have a larger workforce than the Indian Department of Posts.
Amazon also made an entrance into India’s food delivery market in 2020. However, they currently only operate in parts of Bangalore.
According to analysts at Bernstein, India’s food market will be worth $12 billion by 2022.
Zomato is currently the leader among Swiggy and Amazon, with around a 50% share of India’s food delivery market.
In a recent report reviewed by TechCrunch, analysts at Bank of America wrote:
“We find the food-tech industry in India to be well-positioned to sustained growth with improving unit economics.
“Take-rates are one of the highest in India at 20-25% and consumer traction is increasing.
“Market is largely a duopoly between Zomato and Swiggy with 80%+ share.”
Both Zomato and Swiggy had to eliminate hundreds of jobs in 2020 as a result of the Covid-19 pandemic.
In December 2020, Zomato’s co-founder and Chief Executive Deepinder Goyal said the food delivery market was “rapidly coming out of Covid-19 shadows”.
Goyal said:
“December 2020 is expected to be the highest ever GMV month in our history.
“We are now clocking ~25% higher GMV than our previous peaks in February 2020.
“I am supremely excited about what lies ahead and the impact that we will create for our customers, delivery partners and restaurant partners.”
Zomato and Swiggy have improved their respective finances in recent years, despite how challenging it is to make money in food delivery in India.
According to research firms, a delivery item in India is worth $3 to $4, whereas the same item would have a $33 price tag in Western markets such as the USA.
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