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July 7, 2020

Zomato struggles to access $100m funding from China’s Ant Financial

Indian food delivery app Zomato is struggling to access the second tranche of $100m funding from Ant Financial Services.

Indian food delivery app Zomato is struggling to access the second tranche of $100m funding from Ant Financial Services.

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In January, Zomato raised a capital of $150m from Ant Financial, which is an affiliate company of China-based Alibaba Group, but received only $50m in the first tranche of investment.

In April, the Government of India changed its foreign direct investment (FDI) rules. According to the new rules, the companies of countries that share borders with India will not be eligible to avail an automatic route into the FDI, and instead, will be required to obtain the Indian Government’s clearance over any investment proposal.

With the new FDI rules and growing border tensions between India and China, the Indian company is finding it difficult to access the remaining $100m funding from Ant Financial.

Since 2018, Alibaba Group affiliate company has been investing in Zomato and currently holds a 23% stake in the Indian brand.

In addition to Ant Financial, several Chinese businesses have invested in Indian start-up companies. For instance, Tencent invested almost $20m in India’s online food ordering and delivery platform Swiggy as part of $150m funding round in February.

Alibaba has also invested $60m in India’s online grocery store BigBasket through a funding round in April.

In the wake of the border conflict with China, India recently banned 59 Chinese applications, including TikTok and CamScanner.

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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