Uncategorized

Zomato bets on platform play, to invest $1 bn in startups

Bengaluru: Food aggregator Zomato Ltd. has a new plan of action as the company is turning towards a platform play and will invest $1 billion in various startups over the next two years, founder and chief executive Deepinder Goyal wrote in a company blog on Wednesday.

Including its $100 million investment in hyperlocal grocery delivery service, Grofers, this year, Zomato has already committed $275 million across 4 companies over the past six months.

“We plan to deploy another $1 billion over the next 1-2 years, with a large chunk of it likely to go into the quick-commerce space,” wrote Zomato founder and chief executive, Deepinder Goyal on Wednesday.

The food-tech major has already signed definitive agreements to invest $75 million for an 8% stake in Bigfoot Retail Solutions Pvt Ltd., which operates business-to-business (B2B) logistics technology player Shiprocket. The investment is a part of Shiprocket’s $185 million round.

Zomato has decided to invest $50 million in Samast Technologies Pvt Ltd., which operates hyperlocal discovery platform Magicpin.

Along with this Zomato has also divested sports discovery startup Fitso to fitness major Curefit for $50 million, in return for an active stake in the latter. Zomato will also be investing $50 million in Curefit, giving it a cumulative shareholding of 6.4% shareholding worth $100 million in Curefit.

This makes Curefit the 36th Indian startup to turn unicorn this year, valued at $1.5 billion. This is the second startup unicorn Zomato is creating with its investment, after Grofers.

“We believe that the food delivery market in India is still nascent, and there is an opportunity to grow the market at least 10 times over the next few years. In order to make this happen, we are going to continue investing heavily in market creation, in addition to investing in ecosystem companies around our food delivery business so that the cost of running a better food delivery business goes down with time,” explained Goyal about Zomato’s decision to invest in startups operating in complementary business areas.

“We are currently in talks with various restaurant point-of-sale (POS) players, e-vehicle fleet operators, among others, to evaluate investments in these companies keeping the long term in mind,” added Goyal.

Zomato’s investment in these companies comes at a time when it has decided to shut down its grocery and nutraceutical verticals, to focus on its core business around food deliveries. On Wednesday, the company also added that it will be shutting down operations for its subsidiary in Lebanon, which is the only international business Zomato was left with, other than dining-out business in UAE.

Overall customer traffic on our platform in India increased to 59 million average monthly active users (India MAU) in Q2 FY22 as compared to 45 million in Q1 FY22.

Zomato pulled the plug on its international operations last year.

According to the company, adjusted consolidated revenue for Zomato for the quarter ending 30 September, 2021, stood at ₹1420 crore, a 22.6% quarterly growth from the previous quarter. For the quarter ended 30 June, 2021, Zomato reported consolidated revenues of ₹1160 crore

Its consolidated loss widened to ₹430 crore for the quarter ending September as against reporting losses worth ₹356 crore in the previous June quarter.

“This (losses were) was due to investments in the growth of our food delivery business. Three reasons to be specific – increased spending on branding and marketing for customer acquisition, increased investments and growing share of smaller/emerging geographies in our business (which are less profitable today compared to more mature cities) and increased delivery costs due to unpredictable weather and increase in fuel prices,” said Goyal in the company blog.

Overall customer traffic on Zomato’s platform in India increased to 59 million average monthly active users in the September quarter as compared to 45 million in June quarter.

Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint.
Download
our App Now!!


Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
%d bloggers like this: