Zomato along with it’s Q2 FY 22 results also announced that it has committed $275 mn across four start-ups in the last 6 months and will deploy another $1 billion over the next one to two years.
Four investments of $275 mn –
- $100 mn for 9.3% stake in Grofers
- $50 mn in Curefit along with another $50 mn in kind via sale of it’s sports start-up Fitso to Curefit – against 6.4% stake in Curefit at valuation of $1.66 bn
- $75 mn in logistics company Shiprocket for an 8 per cent stake as part of a larger $185-mn round
- $50 mn in e-commerce start-up Magicpin for 16 per cent stake as part of a $60 mn round
Though the communication is that the investments will be focused towards quick commerce space – it’s a very wide definition.
Zomato definitely seems to be taking a leaf out of Info Edge’s book (Zomato’s key investor from early days currently holding 15.23% of Zomato). That’s the way Info Edge has evolved over the years and created wealth for it’s shareholders. It’s promoter Sanjeev Bikhchandani (and hence also an advisor to Zomato) understands this strategy very well.
The strategy seems to be – Keep running the core business and simultaneously invest across the start-ups.
Some are bound to do well and hence will help in keeping investor’s alive in the overall entity. The core food delivery business’s future – only the time will tell. So why to keep all eggs in one basket. Let investors keep guessing.
It’s a decent strategy and frankly nothing wrong.
As per regulatory filings, Curefit is valued at $1.56 bn