Zomato to Form NBFC, Acquires Minority Stakes in UrbanPiper, Adonmo

Zomato, the popular food-delivery and restaurant-finding platform, has notified National stock exchanges that it is investing in Adonmo, an online marketing startup, and UrbanPiper, a food-ordering platform. The board of directors of the corporation has approved the transactions.

Adonmo Pvt Ltd, an advertising technology business, will receive a 19.48 percent share in the company for a total investment of 111.20 crore. The online food aggregator would also invest Rs 37.39 crore in UrbanPiper Technology Pvt Ltd, a software services firm, for a 5 percent interest.

The $24 million funding round includes the purchase of an interest in UrbanPiper Technologies. In an exchange filing, the company verified these events. Certain customary conditions, as well as other terms and conditions agreed upon in the investment agreements, shall apply to the investments.

“The Company has finalised and executed the required agreements for the Proposed Investments, as approved by the Board.” “The Proposed Investments are each subject to the satisfaction of certain customary conditions precedent and other terms and conditions agreed upon in the investment agreements,” according to the filing.

Zomato, which was launched in 2008 by Deepinder Goyal and Pankaj Chaddah, is a professionally run business with no promoters or promoter groups.

In December 2019, early stage investment firm Bace Fund LP, in which Zomato founder and CEO Deepinder Goyal has a stake, made an investment in AdOnMo. It currently holds a 13% stake in the business. Zomato highlighted in a stock exchange filing that Goyal’s $100, 000 investment in Bace Fund LP is a “insignificant percentage of the fund.”

Goyal was also an angel investor in Shiprocket, a firm in which Zomato just made an investment. Goyal then emphasised that he left with “zero profit” before Zomato, which is now a publicly traded company, could invest. Goyal made a $100,000 investment in Shiprocket in early 2021, and Zomato bought a share in the company in November.

Zomato raised nearly $1.25 billion by going public last year, with a fresh issue of equity shares worth Rs 9,000 crore and an offer for sale by current investor Info Edge worth Rs 375 crore.

Zomato signed a deal with Incred, a non-banking finance company, in December 2020, under which the latter will provide loans to restaurant partners. The food delivery business was heavily damaged by the coronavirus (Covid-19) epidemic, which resulted in a dramatic drop in gross merchandise value.

The NBFC’s proposed paid-up capital is Rs 3 crore, while its allowed capital is Rs 10 crore. Zomato said in a filing with the BSE that the company’s name is being finalised, subject to approval by the Ministry of Corporate Affairs.

To operate in the financial services industry, the wholly-owned subsidiary will need Reserve Bank of India approval.