Zomato Secures $1B in Its First Major Fundraise Since 2021 IPO

Zomato, the Indian food delivery and quick-commerce giant, has secured $1 billion in funding from institutional investors, marking its first major capital raise since its 2021 IPO.

The company issued approximately 336.5 million shares, priced at ₹252.62 each (about $3), through a qualified institutional placement, as per a stock exchange filing on Friday.

The fundraising saw strong participation from prominent Indian mutual funds, with Motilal Oswal emerging as the largest investor, acquiring 20.81% of the shares. ICICI Prudential’s funds took 12.78%, while HDFC and Kotak funds bought 8.68% and 5.95%, respectively.

This $1 billion raise has significant strategic implications, notably lowering Zomato’s foreign ownership below 50%, effectively reclassifying it as a “domestic” company. This shift would allow Zomato’s quick-commerce arm, Blinkit, to adopt an inventory-led model—currently limited to domestic firms—enabling more direct control over products and warehousing.

The timing of this capital raise is also notable, coming just weeks after Swiggy’s $1.35 billion IPO. In addition, Zepto, another key player in the quick-commerce space, secured $350 million in funding this month through a deal brokered by Motilal Oswal.

On Friday, shares of Swiggy fell by 4.1%, concluding a 12.8% weekly rally. Zomato’s shares, offered at a 5% discount to investors in the placement, dropped by around 1% on the same day but remain up 127.7% year-to-date. The company now has a market capitalization of approximately $30 billion.

Zomato’s co-founder and CEO, Deepinder Goyal, noted last month that the company—already holding $1.3 billion in cash reserves—raised this additional capital to stay competitive.

The company, which recently posted its second consecutive quarterly profit, is the leader in India’s quick-commerce sector with Blinkit. It competes against well-capitalized rivals such as Swiggy, Zepto, and BigBasket in a market projected to generate over $6.5 billion in annual revenues.

Bank of America analysts, in a note to clients, highlighted the intensifying competition in the quick-commerce industry over the next 6-12 months, with incumbents already raising capital and new entrants like Flipkart, Reliance, BigBasket, and Amazon planning to enter the space. “In this sector, first-mover advantage is crucial,” they wrote, adding that, with the total addressable market (TAM) encompassing around 30 million households in India, it makes sense for market leader Zomato to preserve its roughly 40% market share.