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Ant Financial in discussions to lead $600m investment in Zomato

By Lawrence Gash

India’s leading food delivery start-up looks to Alibaba’s sister company for investment

The Chinese payments giant, Ant Financial, is reportedly in talks to spearhead a $600m (£464m, €545m) funding round in India’s most popular food delivery app, Zomato.

This would be the latest in a series of investments in Indian start-ups and tech firms from the sister company of Alibaba.

Ant already owns a 40 per cent stake in Paytm – the subcontinent’s leading digital payments company – and its e-commerce affiliate Paytm Mall.

Founded in 2008, Zomato services 10,000 cities across 24 countries with more than 100 million active users.

Neither party has commented on the most recent reports, however, analysts estimate that the deal could push Zomato’s value above $4bn (£3bn, €3.6bn).

Should the deal be agreed upon, it would be the latest in a number of acquisitions and investments from Chinese firms in India. Such is the scale of recent investment in the country, that the Indian government is now under domestic pressure to limit the foreign ownership of India’s fastest-growing companies.

Chinese e-commerce giant Alibaba, the sister company of Ant Financial, has seen its rivalry with Tencent, another Chinese corporation, spill beyond China’s borders and into India. After having its $8bn (£6bn, €7.2bn) offer for the Indian e-commerce site Flipkart rejected, Tencent has focused on developing comparatively smaller strategic partnerships with Indian firms. Earlier this week it was part of a consortium of partners that invested $585m (£453m, €531m) in Udaan, an Indian business-to-business ecommerce platform.

Ant Financial and by association, Alibaba, will hope that their interest in Zomato comes to something. Earlier this week the delivery company reported that its losses had fallen 40 per cent between March and September and that its revenue for the first half of the 2020 financial year had increased 225 per cent on the same period last year to $205m (£158m, €186m).

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