Zomato stock soars 4% on investment plans in Adonmo and UrbanPiper

28 Jan 2022 , 09:20 AM

Zomato Limited board has approved the investments by the company in Adonmo Private Limited and UrbanPiper Technology Private Limited.

The company approved acquisition by way of subscription of 11,214 compulsorily convertible preference shares (CCPS) and 10 equity shares collectively aggregating to 19.48% of the share capital of Adonmo Private Limited, for an aggregate cash consideration of Rs112,20,85,728/-.

It also approved acquisition by way of subscription of 1,259 CCPS and 1 equity shares collectively aggregating to 5% of the share capital of UrbanPiper Technology Private Limited, for an aggregate cash consideration of Rs37,38,77,280/-.

During early trade on Friday, Zomato Ltd was trading at Rs93.95 per share up by Rs3.45 or 3.81% from its previous closing of Rs90.50 per share on the BSE. The scrip opened at Rs93 and has touched a high and low of Rs96.40 and Rs93 respectively.

“The Company has finalized and executed the relevant agreements for the Proposed Investments. The Proposed Investments are each subject to fulfillment of ce1tain customary conditions precedent and other terms and conditions agreed under the investment agreements,” the company said in a filing.

The company’s board also approved the incorporation of a wholly-owned subsidiary of the Company as Non- Banking Finance Company.

The company has signed definitive documents for investing ~$5 million in UrbanPiper for a ~5% stake as part of a larger ~$24 million round.

UrbanPiper is a B2B software platform that acts like a “middle layer” between restaurants and food ordering and delivery players and enables restaurants to seamlessly integrate with multiple players through a single digital interface. ~80% of restaurants still use legacy systems or manual processes leading to delay in order flow and errors in order processing. UrbanPiper solves this problem for restaurants through technology helping more restaurants become “food-delivery ready”. It currently processes ~12 million orders a month at 23,000+ restaurant locations in the country.

“With our investment, we hope to fuel UrbanPiper’s penetration in the restaurant industry,” company said.

The company has signed definitive documents for investing ~$15 million in Adomno for a ~19% stake.

Adonmo is an ad-tech company that is taking targeted digital advertising beyond personal devices to outdoor digital screens. Their proprietary technology enables cloud-connected digital screens with contextual and targeted adve1tising capabilities. Outside of online marketing (web / mobile app), this
is the only medium where ads can be served (a) digitally and in real time, (b) customized and targeted for hyperlocal audiences.

“Growth in Adonmo’s platform will help our food ordering and delivery business leverage new digital avenues for customer acquisition,” it said.

“Both UrbanPiper and Adonmo investments are synergistic to our core business and will help accelerate growth of these companies which will help in filling impo11ant gaps in the food ordering and delivery ecosystem in India,” company added.