Ant Financial Enters Restaurant Business with Zomato Shares
Zomato is raising $150 million from Alibaba’s Ant Financial. In addition Ant Financial is buying another 6.66 percent stake of Zomato for $50 million.
This will give Zomato more power to battle in the foodtech industry where it competes with Swiggy, FoodPanda and UberEATS.
The Board of Directors at Info Edge, subject to shareholders and other requisite approvals has decided to allow divestment of 32,629 (about 6.66 percent) equity shares of Zomato Media Private Limited of the paid-up share capital of Zomato on the fully converted and diluted basis either directly or through its fully owned subsidiary, Naukri Internet Services Limited (NISL), as may be deemed fit in the best interests of the Company by way of sale, transfer, assignment or disposal and to execute such agreements and other documents as may be required for the purpose of or in relation to the divestment at an equivalent of $50 million.
The agreement for the sale was made on 1 February, 2018. The expected date of sale to complete is on or before 15 April, 2018.
Zomato has also signed a definitive agreement to undertake a primary fund raise of approximately $150 million from Ant. After the fund raise by Zomato, and sale of shareholding by the Company/NISL, Info Edge’s aggregate shareholding in Zomato shall be about 30.91 percent, on a fully converted and diluted basis.
The amount and percentage of the turnover or revenue or income and networth contributed by such unit or division of the listed entity during the last financial year – The Company owns including through NISL, about 44.74 percent of the paid-up share capital of Zomato on fully converted and diluted basis. NISL is a wholly owned subsidiary of the company. It had a net revenue of Rs 1 lakh only during the previous financial year. It holds 6.81 percent of the paid-up equity share capital of Zomato Media Private Limited on fully converted and diluted basis.
Zomato Media owns and operates zomato.com which generates revenues from advertisements of restaurants and lead sales. The turnover during FY 2016-2017 was net sales of Rs 3322.72 million, on a consolidated basis.
The aforesaid equity shares have been agreed to be bought by Ant Small and Micro Financial Services Group. Ant describes itself as a tech company which brings inclusive financial services to individuals as well as small and micro businesses. Ant operates the world’s largest mobile and online payment platform, Alipay. Launched in 2004, Alipay currently has over 520 million active Chinese users and over 200 financial institution partners in China. In addition to online payments, Alipay is expanding to in-store offline payments both inside and outside China.
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