As part of a broader strategy to invest $1 billion in startups, Zomato has established a non-banking financial corporation (NBFC) and invested in two companies: ad tech business Adonmo Pvt Ltd and B2B software platform UrbanPiper Technology.
The NBFC will let Zomato lend credit to its stakeholders, including restaurants, delivery partners, and customers, according to reports. The NBFC’s name is still being worked out.
In December 2019, early-stage investment firm Bace Fund LP, in which Zomato founder and CEO Deepinder Goyal has a stake, made an investment in AdOnMo. It currently holds a 13% stake in the business. Zomato highlighted in a stock exchange filing that Goyal’s $100,000 investment in Bace Fund LP is an “insignificant portion of the fund.”
Goyal was also an angel investor in Shiprocket, a firm in which Zomato just made an investment. Goyal then emphasised that he left with “zero profit” before Zomato, which is now a publicly-traded company, could invest.
Deepinder Goyal made a $100,000 investment in Shiprocket in early 2021, and Zomato bought a share in the company in November.
“Both UrbanPiper and AdOnMo investments are synergistic to our core business and will help accelerate the growth of these companies, which will help in filling important gaps in the food ordering and delivery ecosystem in India,” Zomato said in a statement.
According to Zomato, 80 percent of restaurants still utilise manual processes to manage order delivery, which causes order flow delays and inaccuracies. UrbanPiper is a software platform that allows restaurants to link with numerous players through the unified digital interface. It was founded in 2016. It provides restaurants with technologies to help them improve their meal delivery capabilities.
UrbanPiper claims to process 12 million orders per month at over 23,000 restaurant locations across the nation.
AdOnMo, on the other hand, is an ad-tech business that is expanding targeted digital advertising beyond personal devices to outdoor digital screens. It was founded in 2016. Their patented technology enables contextual and targeted advertising on cloud-connected smart screens.
While Adonmo recorded a turnover of Rs 3.27 crore on March 31, 2021, UrbanPiper reported a turnover of Rs 6.34 crore.
Last year, Zomato announced ambitions to invest $1 billion in companies over the next two years, with a particular focus on the rapid commerce market. It has so far invested $75 million in Shiprocket, $50 million in Magicpin, and $50 million in Curefit, in addition to its $75 million in Shiprocket.
It also owns a 9.3 percent ownership in Blinkit (Grofers), an online grocery delivery service in which it has spent $100 million. Zomato is also reportedly in talks to invest another $500 million in the fast grocery company, according to sources.
Zomato approached Zepto with a takeover offer of about a billion dollars, according to sources. Zepto has raised approximately $160 million so far and is valued at $570 million. While the meetings did not lead to anything, the fact that they took place highlights the tough competition in India’s fast commerce industry.
Food-delivery giant zomato raised nearly $1.25 billion by going public last year, with a fresh issue of equity shares worth Rs 9,000 crore and an offer for sale by current investor Info Edge worth Rs 375 crore.