Zomato announces investments in Curefit, Magicpin and Shiprocket

Online food delivery giant Zomato Ltd announced on Wednesday a slew of agreements to expand its business, while also released a quarterly earnings update for the July-September period.

The company said it is in the process of selling Fitso to Curefit (Curefit Healthcare Pvt Ltd) for $50 million, with an additional investment of $50 million in net cash in Curefit plus, which will give it a cumulative shareholding of 6.4% worth $100 million in Curefit.

"This will help us potentially explore cross-selling benefits between Zomato and Curefit as we see that food and health will become the same side of the coin in the long term," Zomato said in an exchange filing.

Zomato's net loss widened to ₹429 crore for the quarter ending in September as against a loss of â‚¹229 crore in the last year period.

Zomato said losses increased due to investments in growing the food delivery business and increased spending on branding and marketing for customer acquisition.

Adjusted revenue for the quarter stood at Rs 1,420 crore ($ 189 million), growth of 22.6% QoQ and growth year-over-year (YoY).

The company said that the cost of delivery per order increased by ₹ 5 per order in the September quarter compared to the previous quarter.

The food delivery platform said it does not expect delivery costs to increase further and is confident that the contribution margin will remain positive in the medium and long term.

Additionally, Zomato has signed definitive documents for investing $ 75 million in Shiprocket for an 8% stake as part of a larger $ 185 million round.

Shiprocket is a B2B logistics-tech company that enables online commerce by providing seamless freight forwarding and fulfillment services for direct-to-consumer (D2C) brands and omni-channel sellers.

The company also signed a deal with Magicpin worth $ 50 million in Samast Technologies Pvt Ltd for a 16% stake as part of the total round size of $ 60 million.

Magicpin drives omni-channel growth for local retailers. It has a network of over 170,000 merchants paying in categories including fashion, food, electronics, groceries, pharmaceuticals and entertainment in 50 cities in India.

Including a $ 100 million investment in Grofers in early August 2021, Zomato has now committed $ 275 million to 4 companies over the past six months.

The company also plans to deploy another $ 1 billion over the next 1-2 years, with a large chunk of that likely going to go into the quick-commerce space.

On Wednesday ahead of the results, Zomato shares fell 1.20% to close at â‚¹136 apiece on NSE.

Source: LiveMint

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