News By/Courtesy: Anushka Banerjee | 03 Jul 2020 15:04pm IST

Singapore’s Temasek is in discussions with Zomato to invest as much as $100 million into the online food delivery chain. According to people aware of the developments, it is said that the investments by Ant Financial have been delayed due to the current anti-China sentiment and new foreign direct investment (FDI) rules. 

Since the end of last year, this Gurgaon-based company has been negotiating with Temasek for this huge and potential funding. The discussions between the parties are still ongoing, according to the two sources that are aware of the developments.

“The round was almost finalized, but the terms of the deal are being renegotiated given the impact of Covid-19 on business operations, India’s investment policies, and competitive landscape with Amazon’s launch (of its food delivery business),” said one of the core persons of the negotiation. “Covid-19 has hurt both the profitable listing and discovery businesses as well as the food delivery arm (of Zomato),” he added. 

The company’s fund-raising process has been beset by challenges, including changes to the FDI policy announced in April. The new policy mandates prior government approval for investments by entities based in the neighboring countries of India. Ant Financial, an affiliate of Alibaba Group Holdings, has pumped in only $50 million of an expected $150 million into Zomato, according to BSE and NSE-listed Info Edge. Hangzhou-headquartered Ant Financial is the largest institutional stakeholder in Zomato, holding a 26% stake in the company. 

Temasek first invested in Zomato.in 2015 and from then has been always been into mixed reaction regarding further investments. It holds 3% of the total stakes of the company and estimates to Rs. 310 Crore.

Info Edge, in its analyst call last week, stated that (Zomato) has continued to receive interest from both new and existing investors for the fresh round, which is estimated at $300-400 million, according to a report by The Times of India. In April, Zomato raised $5 million from Pacific Horizon Investment Trust as a part of its ongoing round. 

With the Covid-19 pandemic hitting business, both companies were forced to undertake layoffs and pay cuts. In the first phase of the lockdown, order volumes fell from close to 2.5 lakh per day to less than 300,000. Since then, the applications have seen their order volumes recover by about 35% compared with pre-COVID-19 levels with a large number of individuals losing their jobs.

THIS ARTICLE DOES NOT INTEND TO HURT THE SENTIMENTS OF ANY INDIVIDUAL, COMMUNITY, SECT, OR RELIGION ETCETERA. THIS ARTICLE IS BASED PURELY ON THE AUTHOR'S PERSONAL VIEWS AND OPINIONS IN THE EXERCISE OF THE FUNDAMENTAL RIGHT GUARANTEED UNDER ARTICLE 19(1)(A) AND OTHER RELATED LAWS BEING FORCE IN INDIA, FOR THE TIME BEING.”

Section Editor: Pushpit Singh | 03 Jul 2020 15:47pm IST


Tags : #ZOMATO #TEMASEKSINVESTMENTS #COVID19

India Related Latest News








Copyright Kalyan Krishna MediaZ Private Limited. All rights reserved. Unless otherwise indicated, all materials on these pages are copyrighted by Kalyan Krishna MediaZ Private Limited. All rights reserved. No part of these pages, either text or image may be used for any purpose. By continuing past this page, you agree to our Terms of Service, Cookie Policy, Privacy Policy and Content Policies.