China is in talks to collaborate its Ctrip with India’s Zomato as part of an investment round worth $400 million. Ctrip, China’s largest travel-booking site, is in talks to join the Gurgaon-based Zomato by investing up to $400 million, according to the officials. The Nasdaq-listed Ctrip is expected to pump around $100 million into online restaurant discovery and food delivery platform Zomato, valuing at $1.8-2 billion, according to reports.
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Ctrip will be joined by Zomato’s existing investor Ant Financial, which is affiliated to Alibaba, and a couple of backers, the sources said earlier. Ctrip hasn’t been among the most active Chinese strategies in India, with a sole stake in online travel agency MakeMyTrip. If the deal with Zomato goes well, it will be significant as the first such venture outside of tour services for Ctrip, which has a market capitalisation of over $20 billion.
“The discussions with Ctrip are in the last leg, with only the final amount yet to be decided. It is likely to be around $100 million. While the investment is purely financial, the two companies may explore synergies, which will be more strategic in nature going forward,” a person privy to the discussions said on the condition of anonymity as the deal isn’t official. Another source said the transaction should close in two weeks.
Ctrip, which took over Scottish travel site Skyscanner for $1.7 billion two years ago, also owns Tours4Fun, travel research site Trip.com and Trip by Skyscanner. It’s ranked among the top four online travel agencies globally along with Expedia, TripAdvisor and The Priceline group.
For Zomato, getting one of the biggest strategics in the online travel sector on board will be important as it attempts to grow aggressively in foreign markets.
Zomato is fighting a bitter battle in its home market, with Swiggy, which is also in talks to rack up new funding at upwards of $2 billion in valuation. Both the firms are hotly contending locally with investor money flowing in excess over the past year after a few previous years of steady sentiments around the food-delivery business.
In fiscal 2018, Zomato had a wealth of $74 million. In the previous fiscal, the revenue was $51 million with a reported loss of $54 million.
Zomato is still No. 2 behind Swiggy in the food delivery space, but the gap is not wide. These players have almost doubled the payout of delivery boys, which is very critical for fulfilling the last-mile delivery. Their fight is going to get more intense as they look to hit new order volume numbers and raise more cash from investors.”