“This round is to be used for immediate investments,” said a top company executive. “A bigger round is in the works and the company will make an announcement once that is closed,” the person said. Sequoia Capital and hedge fund Vy Capital are among the investors that put in money in the company.
The funding will be used to expand aggressively in the food delivery space, where it earlier said it plans to invest Rs 300 crore. Existing players in the space like Rocket Internet-owned Foodpanda and TinyOwl have raised large rounds in the last two months. Zomato, the ET Startup of the Year 2014, is looking to bring over 10,000 restaurants on board its food delivery business in India over the next few months.
The service is being piloted in over 2,000 restaurants in Delhi, Bengaluru and Mumbai.
While the valuation in the current round of fundraising could not be immediately ascertained, sources said that Zomato was expecting to raise capital at a valuation of $1 billion. Zomato did not reply to an email seeking its comment.
Zomato was valued at $660 million (about Rs 4,000 crore) in November 2014, when it raised $60 million. The fresh fundraising comes after Zomato’s foray into the US and Australia with the $52-million acquisition of UrbanSpoon in January this year.
“I think we will need another round of funding, having spent almost the entire last round, but we have not decided when and how much,” co-founder and CEO Deepinder Goyal told analysts in a call in January.