InvestorQ : What is Zomato raising funds from Temasek for?
Priyanka N made post

What is Zomato raising funds from Temasek for?

Answer
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NISHA Nayak answered.
1 month ago


Zomato, one of India’s major food-catering platform, is poised to raise funds from a unit of Singapore based Temasek Holdings. Zomato will sell 15,188 shares to Temasek as per the regulatory filings. The deal is likely to lead to an infusion of $60 million into the company.

Zomato has been funded by Ant Financial in the past. However, Ant Financial, being a part of Alibaba of China, has put its India investments on hold. However, there appears to be a good appetite for Indian ecommerce equity paper in the global PE and VC market.

Zomato had earlier received $50 million from Ant Financial in January this year as the first tranche. However, the balance infusion got delayed due to government restrictions on Chinese flows. In a way, Temasek has come to the rescue of Zomato at the right time.

For the financial year 2019-20, Zomato had disclosed doubling of revenues to $394 million, however like most ecommerce plays, its losses continued to mount. It also took a hit on COVID and only now the business flows in the form of GMV is around 80% of old levels.

Over the last few months, Zomato has gone for aggressive cost cutting including laying off more than 550 people. However, the big challenges is that the labour shortages may continue to plague the business in a big way in the coming months.