Zomato had started looking for new sources of capital after it failed to raise the promised $150 million funding from existing investor Ant Group, an affiliate of China's Alibaba Group Holdings earlier this year.
The capital comes as part of the food-tech giant's ongoing Series J round and takes its valuation up to a whopping $3.4 billion, according to estimates from Entrackr. It had raised $5 million from Scotland-based Pacific Horizon Investment Trust. In the run-up to its public offering, the Gurgaon-based company is also in the process of closing a $30-million share sale for its former employees, which will be one of the most significant ESOP liquidity events in India.
Zomato's cash in the bank now amounts to around Dollars 250 million.
It also added that Zomato's FY20 India food delivery GMV grew by 108 percent over FY19.
In an email to employees earlier today, Zomato co-founder and chief executive Deepinder Goyal said the startup had about $250 million cash in the bank and several more "big name" investors would be joining the current round to increase its cash reserve to about $600 million "very soon".
According to reports, Zomato is now gearing up for an IPO in FY21. "In the last few quarters, we have fast-tracked our efforts towards making our business profitable and driving efficiency into our spends".
With regard to current employees not being able to sell their stock options, he said, "Our IPO is around the corner and waiting a little longer will result in significantly more value creation for all of us. We hope to create a lot of value for our current employees who have Esops next year". "We are treating this cash as a "war-chest" for future M&A, and fighting off any mischief or price wars from our competition in various areas of our business", he added in the letter, reviewed by TechCrunch. He also added that Zomato's value is increasing drastically and it was possible due to their dedicated team. In the past, Zomato and Prosus Ventures-backed Swiggy have held discussions for a merger, but talks have not progressed. "While COVID-19 has impacted the size of our business, it has accelerated our journey to profitability", Deepinder Goyal, founder and CEO, Zomato said in a blog post in July.
In its latest report, Zomato estimated that business for the food delivery industry will come back to pre-covid levels in the next 2-3 months, with 70 per cent of restaurants on its platform delivering food at present. The IPO's location is not clear yet, whether it will have its launch in the United States or India.