If there is one vertical within the startups in India that is currently receiving all the attention, it is the food delivery segment. The battle between the two big players Zomato and Swiggy just got more interesting with Zomato raising $200 million from Ant Financial.

The investor is the financial arm of Chinese giant Alibaba. More interestingly, this round of investment has seen the Indian food delivery leader’s valuation moving up beyond the $1 billion mark. At $1.1 billion post this fund infusion, Zomato is now a unicorn entity, a tag very few startups are able to achieve. Reports of this deal coming through and the company’s valuation being placed at $1.1 billion had emerged in September 2017 itself.

Zomato had been valued at around $950 million prior to this $200 million funding by Ant Financial. The funds will actually materialize only by April and the Chinese investor will then hold 18% in Zomato’s equity. The largest equity holder, Info Edge, will continue in its pole position with 31% though it will shed $50 million worth shares in the current capital rearrangement at Zomato.

Reports indicate that the expansion of its activities beyond the Indian shores to markets in the Middle East and South-East Asia has proved attractive for Alibaba, since it has its own plans of taking a position in these markets. The last set of fund-raising for Zomato came over 2 years back and at that time, $60 million got invested and the investors were Temasek and Vy Capital.

In terms of its operations and financial performance too, Zomato has been making some serious progress by cutting down on its spending and therefore the losses. The revenues have also risen sharply. The company has cut down its operating expenses to Rs 77 crore in one year posting Rs 332 crore in revenue.

Though Zomato claims to fulfil around 3 million food delivery orders per month, compared to around 4 million by its rival Swiggy, Zomato clocks revenues from its advertising business also. And the acquisition of the last-mile delivery firm Runnr has also helped it in its operations.

Alibaba, on its part, should have felt synergies in this investment, since it has already invested more than $2 billion in the Chinese food order and delivery startup Ele.me. The Chinese giant also has its eyes on expanding its base worldwide, particularly in Southeast Asia and more critically, Alibaba sees brighter prospects for its payment vertical Ali Pay, due to the frequency of payments involved in this business.

The Indian food delivery market is witnessing its own churn with large-sized players, like Ola-Foodpanda, UberEats and Google Areo entering the space, besides Zomato and Swiggy making it a five-way battle.