Foodtech major Zomato on Wednesday said that it has committed investments of $275 million in four startups in the past six months and will deploy another $1 billion over one to two years, with most of it going to the quick commerce space.
The company said for this reason, it has shut down its nutraceutical business, selling its stake in sports start-up Fitso to Curefit for $50 million, will invest another $50 million in Curefit and in exchange and will take 6.4 per cent shareholding in the company in which Tata recently acquired a stake. This also means that Curefit’s valuation is at $1.66 billion after the investment.
The food delivery company has also signed definitive documents for investing $75 million in logistics company Shiprocket for an 8 per cent stake as part of a larger $185-million round.
Zomato said it will invest $50 million in e-commerce start-up Magicpin for 16 per cent stake as part of a total funding round size of $60 million. Magicpin allows omni-channel expansion for local retailers and has a network of more than 170,000 paying merchants in categories including fashion, food, electronics, grocery, pharma, entertainment across 50 cities in India.
Zomato founder and CEO Deepinder Goyal said, “We are in the process of divesting or shutting down our non-core businesses which were not going to significantly move the needle for our shareholders in the long term. All of these businesses that we are divesting or shutting down, contributed less than 1 per cent to our adjusted revenue and 13 per cent to our adjusted EBITDA loss in Q2 FY22.”
The unicorn rush in India this year and growth of digital businesses has led the company to expand its ambitions and aim for creating a $10 billion business by revenue in a few years time. “The paradigm for India has changed within a year and that gives us a new opportunity to build a much bigger Zomato than what we dreamt of a year ago,” the company said.