Zomato, TinyOwl, Swiggy in talks to raise funds worth Rs 1,000 crore

eCommerce players like online food ordering startup Zomato, TinyOwl and Swiggy are in full swing and trying to raise money through various means. Reports suggest that all of these players are in various stages of advanced talks to raise about Rs 1,000 crore ($157 million) for their businesses.

According to Economic Times, Zomato, which began its food delivery service in May, has initiated discussions to raise $80-100 million (Rs 510-640 crore) while Swiggy has mandated Avendus Capital for a new round of funding in less than two months after it raised Rs 105 crore. TinyOwl is also in talks to raise Rs 190-256 crore after it secured Rs 100 crore in February.

If reports are to be believed, the trend of ordering food online has grown in India in the past one year and domestic restaurant aggregators need huge servings of capital to be able to quickly ramp up daily orders if they are to grow as rapidly as their peers in the US and the UK.
US-based GrubHub, a $2.6 billion company have been handling 234, 700 orders a day while India-based Foodpanda handles approx 30,000 orders daily and the number for TinyOwl remained to 8,000.

In an email written to ET, Zomato co-founder and CEO Deepinder Goyal mentioned, "We have given a bank a mandate to start the fundraising process for us but we haven't reached out to any investor yet. We will start reaching out to investors sometime in September."
In April this year, Zomato raised a total of Rs 301 crore from the existing investors including Info Edge and Sequoia Capital at a valuation just under Rs 5,000 crore.

"Zomato has been in talks with investors but isn't able to get the valuation or cash it needs to boost the delivery business," informed an official aware of the development.

The official requesting anonymity further added, "Therefore, internal investors agreed to back the company through the beta launch and testing (of the food ordering service) and when the company is at significant traction, they will explore the opportunity to raise about $100 million, valued at $1 billion."

The Bengaluru-based startup, aunched last year, Swiggy is likely to raise Rs 300 crore but as per the sources, the amount is yet to be finalized. Another Mumbai-based TinyOwl is likely to finalize its fundraising discussions with investors later this month.

Swiggy CEO Sriharsha Majety and TinyOwl CEO Harshvardhan Mandad both confirmed their plans to raise money but declined comment any further on the matter.