HomeBusinessZomato's funding of Shiprocket generates controversy - Times of India

Zomato’s funding of Shiprocket generates controversy – Times of India

BENGALURU: E-commerce logistics company Shiprocket on Friday announced a $185 million funding round co-led by Zomato, Temasek and Lightrock India. But the development generated some controversy after former Infosys CFO TV Mohandas Pai wondered, in a tweet, if there’s a conflict of interest if a listed company invests in a startup where the founder of the listed company had invested.
His reference was to Zomato founder Deepinder Goyal‘s investment in Shiprocket.
Goyal, however, quickly countered the charge, pointing out that he had exited his personal investment of $100,000 in Shiprocket at zero profit before Zomato stepped in for the investment. He said this personal investment was one of the key reasons Zomato got closer to Shiprocket and its founders, and that’s “how we discovered that there’s potential long term strategic fit between the two companies.” He said they may continue to follow this strategy of personal investments followed by company investments.
Goyal also chided Pai for marking his tweet to Sanjeev Bikhchandani, founder of Info Edge, an early investor in Zomato, instead of to him.
Shriram Subramanian, founder of InGovern Research Services, a corporate governance analysis firm, wasn’t fully convinced by Goyal’s response. He told TOI that Zomato “should have been forthcoming on the quantum of the investment into Shiprocket by Deepinder Goyal and the company, and whether Goyal recused himself from the board when it decided to invest into Shiprocket.”
Launched in 2017, Shiprocket is creating a seamless logistics data platform that connects retailers, carriers, and consumers across national and international locations. Its shipping solutions are available across 29,000 pin codes within India and 220 countries across the world.
Shiprocket will deploy the freshly infused capital towards core product expansion, R&D, talent acquisition, and development of a comprehensive suite of products that will help retailers deliver seamless customer experience in line with that of large e-commerce platforms.
A portion of the funds will also be directed towards the platform’s new strategic initiatives, including hyperlocal delivery services offering deliveries with low turnaround times, on the back of its extensive courier partnerships and growing fulfillment network and global expansion, starting with the Middle East.
Saahil Goel, CEO and co-founder of Shiprocket, said they are excited about “the vast, untapped opportunity that lies in post-purchase technology enablement in the D2C (direct to consumer) e-commerce space.”

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