Ant Financial to Invest Over USD 200 Milllion in Indian 'Meituan'
The financial affiliate of Alibaba is said to be securing a new investment in India's food delivery market. As the quasi-biggest shareholder, it will intensify competition between Zomato and Swiggy, just like Eleme and Meituan in China.
Ant Financial, the Alibaba fintech arm valued at over USD 160 billion, is eyeing another Indian startup to cement its future status in that nation’s rising market.
According to the Economic Times (ET), Indian food ordering and delivery platform Zomato is finalizing a new round of financing of USD 600 million. Citing two people familiar with the matter, this investment is led by Ant Financial and Singaporean state fund Temasek.
“We are raising a round to fuel our ambitions in food delivery, dining out and sustainability. However, at this stage, we cannot disclose any further details,” a Zomato spokesperson reported to ET.
In February 2018, Ant Financial secured a 14.7% ownership of Zomato through an investment of USD 210 million. Only nine months later, in November 2018, it followed that up by raising its stake to 23% with an injection of USD 150 million which is showed by regulatory filings. After this round of funding, the company will see its stake touch almost 29%, making it the largest shareholder of Zomato.
Moreover, Zomato’s valuation may cross USD 3 billion in the new funding round, marking a USD 1 billion increase from its current valuation. The significant capital infusion will further intensify the battle between Zomato and Swiggy, the largest two players in India's food delivery market.
These two players have been running on a cash burn game since 2018, mimicking their role models in China, Eleme and Meituan, the two dominating food delivery players in that country. What's more interesting are the backers. Ant Financial is expected to be the biggest investor of Zomato and its parent company Alibaba has already taken over control of Eleme, while Swiggy and Meituan have received funds from Tencent.
The polarized investment styles of Alibaba and Tencent have been frequently discussed. Alibaba is known for its strong control over share-holding companies to supplement Alibaba's ecosystem, while for Tencent, the investment is more like support to those who have growth potential.
Citing ET, there have been talks of Zomato being unwilling to receive funds from Ant Financial, fearing that deal terms may be loaded and may threaten their own control over the company.