Indian restaurant aggregator Zomato has launched Zomato Wings, which is a platform to help restaurants raise money for growth. Zomato Wings hopes to be the one-stop place for various types of funders looking to make private investments in restaurants and cloud-kitchens. Zomato will help restaurants position their "story and metrics" in the right manner and connect them with the right investors.
"Just like ambitious restaurant entrepreneurs look for investors, investors also hunt for brands and teams that have the potential to become the next big chain. We at Zomato have seen the growth story of such restaurants first hand. 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," Zomato said in its announcement (opens in new tab).
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Zomato Wings to help at least 100 restaurant brands
Zomato said that it was not easy for restaurants in India to raise funding through growth-focused equity investors.
Some large chains have attracted investors, but that is obviously not enough. In the last three years, only about 25 restaurants and cloud-kitchens saw Series A or larger equity funding rounds.
"There are thousands of budding restaurants that may not have the expertise or focus to fundraise at the right time from the right investors. This is where we want to help," Zomato said.
Zomato hoped that its exposure to enterprising restaurants would come handy for it to provide leads to potential investors.
Zomato has a target of giving wings to at least 100 restaurant brands in the next three years through this new initiative.
Will Zomato too invest in restaurants?
Zomato, which itself tapped the bourses with a $1.26 billion initial public offering earlier this year, has announced it has invested nearly $275 million across four companies over the past six months. These include fitness startup Curefit, logistics firm Shiprocket, grocery delivery player Grofers, and savings app Magicpin.
So that begs the question will Zomato will also invest in some interesting restaurant ventures. According to Zomato, it wouldn't
"We are mindful that by owning an equity stake in one brand, we may raise some concern among other brands. Again, we do not want to compete with restaurants, and want to remain a fair and neutral platform for all restaurants," it explained.
Zomato’s role would be limited to being a facilitator of fundraising for restaurants.