Zomato, the Indian food delivery and quick-commerce giant, has raised $1 billion in funding from institutional investors. This marks Zomato's first major fundraising effort since its 2021 IPO.
The funding round involved issuing approximately 336.5 million shares at a price of ₹252.62 each ($3). Major Indian mutual funds participated, with Motilal Oswal, ICICI Prudential, HDFC, and Kotak funds being the largest investors.
This investment strategically positions Zomato as a "domestic" company by reducing foreign ownership below 50%. This change will allow Blinkit, Zomato's quick-commerce unit, to operate with an inventory-led model, giving it more control over products and warehousing.
The timing of this funding round is notable, occurring shortly after rival Swiggy's $1.35 billion IPO and Zepto's $350 million funding round. India's tech IPO boom continues to attract significant investment.
Zomato's CEO, Deepinder Goyal, stated that the additional funds are intended to maintain competitive parity in the rapidly evolving quick-commerce market. This market, projected to generate over $6.5 billion in annual run-rate revenues, is becoming increasingly competitive with players like Swiggy, Zepto, and BigBasket. Scaling startups is a key focus for maintaining competitiveness.
Analysts predict intensified competition in the quick-commerce sector over the next 6-12 months, with existing players raising capital and new entrants like Flipkart, Reliance, BigBasket, and Amazon expected to join the fray. Zomato's move aims to preserve its market-leading position in this expanding sector. For more on market dynamics, see Y Combinator's startup strategy.