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China's largest travel-booking site Ctrip is in talks to invest in online restaurant discovery and food-delivery platform Zomato as part of a financing round, which could go up to USD 400 million (Rs 2,800 crore), two people in the know of the transaction said. The Nasdaq-listed Ctrip is expected to pump around USD 100 million into Zomato, valuing the Gurgaon-based firm at USD 1.8-2 billion, the people said. Ctrip will be joined by Zomato's existing investor Ant Financial, an Alibaba affiliate, and a couple of backers, the sources cited earlier said. Ctrip hasn't been among the most active Chinese strategics in India, with a sole investment in online travel agency MakeMyTrip. If the deal with Zomato goes through, it will be significant as the first such bet outside of travel services for Ctrip, which has a market capitalisation of over USD 20 billion. "The discussions with Ctrip are in the last leg, with only the final amount yet to be decided. It is likely to be around USD 100 million. While the investment is purely financial, the two companies may explore synergies, which will be more strategic in nature going forward," a person privy to the discussions said on the condition of anonymity as the deal isn't official. Another source said the transaction should close in two weeks. Spokespersons for both Zomato and Ctrip did not respond to TOI's queries. In its home market, Zomato is fighting a bitter battle with Swiggy, which is also in talks to rack up new funding at upwards of USD 2 billion in valuation. Both the players are hotly contesting locally with investor money flowing in abundance over the past year after a few previous years of sober sentiments around the food-delivery business. In fiscal 2018, Zomato had a revenue of USD 74 million. In the previous fiscal, the revenue was USD 51 million with a reported loss of USD 54 million. Research firm Forrester's analyst Satish Meena said, "Zomato is still No. 2 behind Swiggy in the food delivery space, but the gap is not wide. These players have almost doubled the payout of delivery boys, which is very critical for fulfilling the last-mile delivery. Their fight is going to get more intense as they look to hit new order volume numbers and raise more cash from investors."
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