Zomato, the online food delivery company, has announced the introduction of Zomato Wings, a platform that connects investors with restaurants to help them raise capital.
Thousands of up-and-coming restaurants may lack the expertise or attention needed to attract funds from relevant investors at the right time. Zomato Founder and CEO Deepinder Goyal wrote in a blog that the company wants to serve.
Goyal wrote in a blog, “We hope to build the go-to platform for venture capitalists, angel investors, family offices, etc. looking to make private investments in restaurants and cloud kitchens.” Goyal, on the other hand, has made it clear that Zomato will not invest in any of its partner restaurants and that its involvement will be limited to facilitating restaurant fundraising. Zomato will not invest in brands or restaurants as it does not seek to compete with restaurants and chooses to remain a fair and neutral channel for all restaurants, he added.
The blog cited reports from Tracxn to claim that around 25 restaurants and cloud kitchens have completed their Series A or higher equity funding rounds in the last three years, illustrating that it is difficult for restaurants in India to obtain financing from growth-oriented equity investors.
Zomato expects to become the go-to platform for venture capitalists, angel investors, family offices and many others interested in making private investments in restaurants and cloud kitchens by compiling a set of cloud-based restaurants and kitchens that could very well become rockets if ignited with equity, the 38-year-old CEO said.
The Gurgaon-based company announced earlier this month that it had sold its fitness center subsidiary Fitso to fitness startup Curefit for $50 million. In addition to cross-selling, Zomato has invested an additional $50 million in Curefit. He acquired a full 6.4% stake in the $100 million fitness startup. Fitso, a comprehensive sports facility provider and discovery platform, was acquired by Zomato in January 2021 for a reported value of between Rs 80 crore and Rs 100 crore.
He also reached definitive agreements last month to spend $75 million for an 8% stake in Bigfoot Retail Solutions Pvt Ltd., which runs business-to-business (B2B) logistics technology provider Shiprocket. The investment is part of a $185 million funding round. Additionally, Zomato has agreed to invest $50 million in Samast Technologies Pvt Ltd., owner of magicpin, the hyperlocal discovery portal.
Zomato, which was crowned India’s first tech unicorn earlier this year to go public, posted a consolidated net loss of Rs 430 crore earlier this month. The online food aggregator giant roughly doubled its consolidated net loss for the quarter that ended in September to Rs 434.9 crore from Rs 229.8 crore in the same quarter last year. Its operating income nearly doubled during the reporting period to Rs 1,024.2 crore from Rs 426 crore in the second quarter of FY21, due to growth in the delivery business of food.