It seems that SoftBank seriously wants to become a potential kingmaker in India’s food delivery space as reports are emerging about its possible plan to invest $200-250 Mn in Zomato. This comes barely days after the news that claimed that SoftBank is among the front-runner to invest almost the amount in Zomato’s main rival Swiggy.
One of the close sources claimed that SoftBank’s top official held a meeting with counterparts from Zomato earlier this week. The meeting explored Zomato’s various business metrics as well as its plans for international expansion in the next few years.
While SoftBank’s investment in Zomato as well as Swiggy may result in conflict of interest, the Japanese conglomerate has successfully pulled off such a tricky situation in highly competitive e-commerce space. It owns substantial stake in Bengaluru based e-commerce behemoth Flipkart as well as its rival Paytm Mall.
India’s food tech space is once again looking very promising
After a not so good show in 2016, last year India’s online food tech sector made a surprising turnaround after Swiggy and Zomato displayed highly improved performance. Both companies, two most dominant players in the sector, managed to cut their cost while substantially improving their booking orders. As a result, both companies witnessed huge revival of interest from the investment community.
This was well reflected earlier this year as Swiggy raised nearly $100 from Naspers and Zomato received $200 million funding cushion from Alibaba.
However, the recent buzz in the online food tech sector is also due to the fact that cab haling companies Ola and Uber have also entered into the market. While Ola acquired Foodpanda in December last year, Uber also launched its food delivery app UberEat in selected cities.
Industry experts claimed that Zomato and Swiggy are desperate for more funds partly because Ola and Uber’s entry is likely to soon skyrocket the competition in the market.