Restaurant search
services provider Zomato acquired U.S.-based rival Urbanspoon for about $50
million in one of the biggest overseas deals by an Indian startup and a company
executive said it was in talks to raise about $100 million (roughly Rs. 621
crores) in fresh funding.
India’s rapidly growing
Internet- and mobile-based companies have attracted billions of dollars in
funding in the last couple of years from foreign investors including Japan’s
SoftBank and Temasek Holdings Pvt Ltd.
Some of the technology
startups have used the private equity investments to acquire local peers to boost
presence in a market that has the world’s third-largest Internet user base, but
overseas acquisitions are rare.
The acquisition of
Urbanspoon, which marks Zomato’s entry into the United States, Canada and
Australia, will result in its presence in 22 countries, covering more than one
million restaurants, Zomato said.
Seattle-based
Urbanspoon, which was previously owned by media mogul Barry Diller’s
IAC/InterActive, competes with Yelp, a popular website that lets users review
and rate restaurants and other services.
“It’s an all cash deal.
We pretty much had to spend all our last round of funding on this and it’s sort
of a big deal for us,” Zomato Chief Executive Deepinder Goyal told Reuters in a
phone interview.
Zomato, backed by
private equity investors including Sequoia Capital and India’s Info Edge India
Ltd, is talking to existing as well as new investors to raise around $100
million in the next 30 days, he said. It raised $60 million in November led by
Info Edge and Vy Capital, with participation from Sequoia Capital.
The startup is likely to
be valued at about $1 billion (roughly Rs. 6,213 crores) after completing the
fresh round of investment, Goyal said. Founded in 2008, Zomato iscurrently
valued at around $660 million (roughly Rs. 4100 crores).
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