The initiative comes when there has been limited investor capital inflow into restaurants and cloud kitchens over the last few years, Zomato’s cofounder and CEO Deepinder Goyal said.
“While some large chains have attracted investors, we have barely scratched the surface—in the last three years, only about 25 restaurants and cloud kitchens saw Series A or larger equity funding rounds, as per (industry tracker) Tracxn,” Goyal wrote in a blog post last week. “By curating a set of restaurants and cloud kitchens that could become rocketships if fuelled with equity capital, we hope to build the go-to platform for venture capital firms, angel investors, family offices, etc., that are looking to make private investments in restaurants and cloud kitchens,” he said.
A four-member ‘Wings’ team, which is part of its overall supply team, will oversee these deals, a Zomato spokesperson told ET. A few such deals are currently in the pipeline, the spokesperson added.
The company did not disclose details of the investors it will tap.
Zomato will help restaurants of a certain scale and size, the spokesperson said, without going into specifics. The Wings team will help select restaurants and cloud kitchens to “position their story and metrics in the right manner and connect them with the right investors”.
“As we partner with more investors by connecting them with enterprising restaurants, more budding restaurants would use this platform for fundraising, and the platform’s flywheel would create a win-win for restaurants and investors, and by extension, for Zomato,” Goyal wrote in the blogpost.
Zomato will not invest in restaurants or cloud kitchens, in order to avoid any conflict of interest with other brands.
The company
has taken bets on startups like logistics firm Shiprocket, discovery platform for offline retailers Magicpin and fitness platform Curefit, as part of its strategy to deploy $1 billion in emerging enterprises in the next 1-2 years.
Total funding for cloud kitchen startups this year has doubled to $234.2 million as of October, compared to $112.4 million in all of 2020, according to Tracxn data. But 75% of the funds raised this year went to Rebel Foods, when the operator of Faasos and Behrouz Biryani
raised $175 million in a recent funding round.
Zomato
is currently in talks to invest as much as $500 million in online grocery firm Grofers, which is also rapidly expanding its ultra-fast commerce vertical, ET reported earlier this month.
On Tuesday, Zomato’s shares rose 2.45% to Rs 152.60 apiece on the BSE while the benchmark Sensex ended the day 0.34% lower at 57,064.87 points.
