Online food delivery and restaurant recommendation platform Zomato has raised close to $5 million (Rs 38.20 crore) from Pacific Horizon Investment Trust, a fund managed by British investment manager Baillie Gifford.
According to documents filed by Zomato with the Registrar of Companies, and accessed by business intelligence platform Tofler, the Gurugram-headquartered company has allotted 1,177 Series J2 Compulsorily Convertible Cumulative Preference Shares (CCCPS) at $4,245.56 apiece, for a total consideration of $4.99 million, to Pacific Horizon Investment Trust.
Online publication Entrackr was the first to report the development and said the investment valued the Deepinder Goyal-led company at about $3.25 billion, a shade below its rival Naspers-backed Swiggy.
Pacific Horizon Investment Trust invests in stocks across Asia Pacific, excluding Japan, and in the Indian subcontinent. According to its website, the company as of February 29 has allocated 8.5% of its total assets in India, and holds positions in listed entities, which includes, Info Edge, an early backer of Zomato, ICICI Lombard, Quess Corp and Reliance Industries.
Separately, in China, as of January 31, the fund has invested in a number listed Chinese technology and consumer internet stocks, including Tencent, Alibaba, JD.com and Ping An Insurance, among others.
Baillie Gifford, the Edinburgh-headquartered fund management firm, had earlier invested in Flipkart, India’s largest online retailer, in 2014, while also backing homegrown ride-hailing major Ola a year later.
The firm manages close to $290 billion across multiple assets classes, including, specialist equity, fixed income and multi-asset portfolios for its global client base. As of end-February, its emerging markets growth fund had allocated a shade over 13% of its total assets to India.
The latest capital infusion comes a little over three months after Zomato acquired Uber’s food delivery business in India in $206 million all-stock deal, a transaction that also saw the San Francisco-based ride-hailing giant pick up 9.9% stake in the former.
The same month, Info Edge, which owns about 24.5% stake in Zomato, stated in a filing with the Bombay Stock Exchange (BSE), that Ant Financial, an affiliate of Alibaba as well as the largest institutional stakeholder in Zomato, had led a $150 million funding round in the company, in the process, at a pre-money valuation of over $3 billion.
Rival Swiggy’s valuation has stayed largely flat over the past 12 months, after it raised $113 million in March last year led by South African internet giant Naspers, its largest investor at a valuation of $3.6 billion.
Both companies have seen food delivery orders plunge by about 70% in the wake of the Covid-19 pandemic, which has forced Asia’s third-largest economy into a three-week nationwide lockdown.
Additionally, the businesses also face other challenges, including winning back customer trust about food hygiene and bringing more restaurants on to their platforms.