Online food-delivery company Zomato is expecting as much as $100 million from its existing investor, Singapore-based Temasek, as told by people aware of the matter. This development comes during the changed FDI policy and anti-China sentiments prevailing in the country which delayed the already finalized investment by Ant Financial.
Temasek’s investment is said to be part of the larger funding round which the Gurugram-based company has been trying to negotiate since 2019-end. Both the firms are still negotiating the terms of the deal, according to the sources.
“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). Covid-19 has hurt both the profitable listing and discovery businesses as well as the food delivery arm (of Zomato),” one of the sources stated.
The revised FDI guidelines require the investments coming through enterprises from bordering countries with India to pass the government channel. Ant Financial, an affiliate of the Alibaba Group had only invested $50 million out of the promised $150 million. It is also the highest stakeholder in the company with 26% stake in its hands.
Temasek, which first invested in Zomato in 2015, has always been in the mix to pump in further capital. It holds a 3% stake, having invested Rs 310 crore into the company, according to data collated by Tracxn. The company was valued at $3 billion in January. The valuation was, however, contingent on Ant fulfilling its commitment.
Both Zomato and Temasek have not commented on the development yet which leaves the market with speculations of the partnership.