Restaurant search services provider Zomato acquired US-based rival Urbanspoon for about $50 million in one of the biggest overseas deals by an Indian startup and a company executive said it was in talks to raise about $100 million in fresh funding.
India`s rapidly growing Internet- and mobile-based companies have attracted billions of dollars in funding in the last couple of years from foreign investors including Japan`s SoftBank Corp and Temasek Holdings Pvt Ltd.
Some of the technology startups have used the private equity investments to acquire local peers to boost presence in a market that has the world`s third-largest Internet user base, but overseas acquisitions are rare.
The acquisition of Urbanspoon, which marks Zomato`s entry into the United States, Canada and Australia, will result in its presence in 22 countries, covering more than one million restaurants, Zomato said.
Seattle-based Urbanspoon, which was previously owned by media mogul Barry Diller`s IAC/InterActiveCorp, competes with Yelp Inc, a popular website that lets users review and rate restaurants and other services.
"It`s an all cash deal. We pretty much had to spend all our last round of funding on this and it`s sort of a big deal for us," Zomato Chief Executive Deepinder Goyal told Reuters in a phone interview.
Zomato, backed by private equity investors including Sequoia Capital and India`s Info Edge India Ltd, is talking to existing as well as new investors to raise around $100 million in the next 30 days, he said. It raised $60 million in November led by Info Edge and Vy Capital, with participation from Sequoia Capital.
The startup is likely to be valued at about $1 billion after completing the fresh round of investment, Goyal said. Founded in 2008, Zomato is currently valued at around $660 million.