Food & Beverages

China’s Ctrip Likely To Join Zomato’s $400m Funding

China’s Ctrip could make first bet in food biz, invest $100 mn in Zomato

China’s Ctrip Could Make First Bet In Food Biz, Invest $100 Mn In Zomato

The Chinese company with a market capitalization of over $20 billion is expected to pump in close to $100 million into Zomato, valuing the company at $1.8-2 billion

China’s largest travel booking site Ctrip may invest in online food delivery platform Zomato as part of a funding round that could go up to $400 million (close to Rs 2,800 crore), sources told The Times of India.

This will be the first bet in the food business for the Chinese company Ctrip has not been very active in investing in India, with a stake only in MakeMyTrip.

The investment by Ctrip, which has a market capitalization of over $20 billion, will value Zomato at $1.8-2 billion.

Zomato is currently funded by the likes of Ant Financial, an Alibaba affiliate among other investors who may also participate in the upcoming round.

The discussions in the final stages, sources said. “Only the final amount is yet to be decided. It is likely to be around $100 million and should wrap in two weeks. While the investment is purely financial, the two companies may explore synergies which will be more strategic in nature going forward,” they added.

The Nasdaq-listed Ctrip acquired Scottish travel site Skyscanner for $1.7 billion in 2016. It also owns Tours4Fun, travel research site and Trip by Skyscanner. It is one of the four biggest travel agencies in the world, right alongside Expedia and TripAdvisor. Zomato is trying to break into the international markets and it will be a positive for the company to bag this deal.

On the home ground, Zomato is competing neck-and-neck with Swiggy, which is also in the middle of talks for a funding upwards of $2 billion in valuation. Money has poured into the food delivery business in the past one year as the companies contest in the Indian market. Zomato had a revenue of $74 million in fiscal 2018.

“Zomato is still no. 2 behind Swiggy in the food delivery space but the gap is not wide,” analyst Satish Meena told TOI. “These players have almost doubled the payout of delivery boys, which is very critical for fulfilling the last-mile delivery. Their fight is going to get more intense as they look to hit new order volume numbers and raise more cash from investors.”

Zomato clocks in over 15 million orders per month while Swiggy executes over 18 million orders.