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Alibaba plans to invest funds in Zomato whereas Uber allocated $200 million for UberEats

May 17, 2018, 7:11 am

Online food delivery startups in India are gaining popularity within no time. Zomato and Swiggy are planning to invest $200 million from risk investors. On the other hand, ride-hailing service provider Uber planned to invest $200 million into its food delivery business UberEats.

According to the news obtained from sources, Zomato has taken a way to initiate their goals of capturing the large Indian market. Zomato is thus busy in talks with Alibaba, the Chinese eCommerce major which has already invested in multiple brands in India. On the other hand, Swiggy is planning for new $200 million financing round with the help of Yuri Milners DST Global, Coatue Management and Meitun –Dainping which is a Chinese food review and delivery giant.

Some insider sources stated that fresh capital will help Zomato to offer greater discounts and promotions to lure consumers. The person familiar with the matter stated that all of this four companies i.e Zomato, Swiggy, UberEats, and Foodpanda have almost $800 million to $1 billion of funds to allocate to the online food delivery sector. The insider related to this matter disclosed that after affiliate Ant Financial invested in restaurant discovery and delivery app Zomato this year, Alibaba is now moving its steps towards the Gurgaon-based company in a $200 million financing round.

Swiggy is docking about 10 million orders monthly while Zomato registered approximately 7.5 million orders. Foodpanda is leading behind with 40,000 monthly orders whereas UberEats has approximately 20,000-25,000 orders per month.

Sources say that Zomato’s financing round is in an early stage, where the double move down Zomato comes right after Alibaba group who brought China food delivery service Ele.me. While the euphoria among investors has returned seeing the high growth of these companies, the burn rate on the back of spiraling customer acquisition costs hasn’t come down for anyone in the sector. An investor in an online food ordering platform said “Swiggy and Zomato have been scaling very quickly as they are witnessing higher frequency and return customers. What will be critical is how these players are able to use their fleet to deliver more than just food,”

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