Indian food delivery app Zomato has raised $1 billion from institutional investors, completing its first major fundraise since its 2021 IPO.

The food delivery and quick-commerce giant issued approximately 336.5 million shares priced at ₹252.62 each ($3) in a qualified institutional placement, according to a stock exchange filing on Friday.

The fundraise saw strong participation from leading Indian mutual funds. Motilal Oswal emerged as the largest investor, with its family of funds picking up 20.81% of the shares issued. ICICI Prudential’s funds secured 12.78%, while HDFC and Kotak funds acquired 8.68% and 5.95%, respectively.

The $1 billion fundraise strategically shifts Zomato’s status to a “domestic” company by pushing its foreign ownership below 50%. This would allow its quick-commerce unit, Blinkit, to adopt an inventory-led model (currently restricted to domestic firms), enabling direct control over products and warehousing.

The timing of the capital raise is also strategic, coming just weeks after rival Swiggy’s $1.35 billion IPO earlier this month. Zepto, another leading quick-commerce startup, secured $350 million this month in a deal brokered by Motilal Oswal.

Shares of Swiggy were down 4.1% on Friday, capping this week’s overall rally to 12.8%. Shares of Zomato, offered to investors participating in the share placement at a 5% discount, were down roughly 1% on Friday, but remain up 127.7% year-to-date. Zomato has a market cap of about $30 billion.

Zomato’s co-founder and CEO Deepinder Goyal last month said the firm, which already had $1.3 billion in cash reserves, was raising the additional funds to maintain competitive parity.

The company, which recently reported its second consecutive quarterly profit, leads India’s quick-commerce market with Blinkit, competing against well-funded rivals like Swiggy, Zepto, and BigBasket in a sector projected to generate over $6.5 billion in annual run-rate revenues.

“We see the quick-commerce industry going through a phase of increased competition in the next 6-12 months. Incumbents in quick-commerce are looking to or have already raised capital. Four new names including Flipkart, Reliance, BigBasket & Amazon are looking to enter the quick-commerce space,” Bank of America analysts wrote in a note to clients.

“In this space, first mover advantage matters, and given the TAM is c. 30 mn households (330 mn households in India), we believe it is logical for the market leader Zomato to want to maintain its leading c. 40% share.”