Zomato, the online food ordering and restaurant delivery startup, is in advanced discussions with Alibaba and its payments affiliate Ant Financial, also known as Alipay, for raising $200 million of capital in a bid to strengthen its cash reserves fighting Swiggy and Foodpanda. If the deal goes through, the startup will be valued at $1.1 billion and joining the prestigious unicorn club. Zomato last raised $60 million from Temasek and VY Capital in Sept’15 in a round that valued the company at about $960 million. The startup is looking to put equal focus on growing its high-margin advertising business this financial year along with the food-ordering business.
The online food startup is locked in a battle for market leadership in the food delivery space, which is more capital intensive. It claimed to have delivered over 3 million monthly orders for the first time in July this year compared to competitor Swiggy’s claims of 4 million monthly orders. The firm, however, maintains that its average order value is higher than that of Swiggy resulting in higher gross sales. The interest of Alibaba-Ant Financial in Zomato comes as the Chinese ecommerce giant is aggressively expanding its presence across the world, especially in markets like Southeast Asia.