The move is widely seen as facilitating an initial public offer by the affiliate.
The prospectus issued by Alibaba in August 2014 disclosed this potential trading arrangement.
The latest funding round has been led through Ant Small and Micro Financial Services Group, a subsidiary of Alibaba, that operates mobile and online payment platform Alipay, said Zomato investor Info Edge in a BSE filing.
Ant Financial, formerly known as Alipay, was spun out of Alibaba in 2011 and is worth about $60 billion, making it the most valuable...
Ant Financial will hold around 18% stake in Zomato post the investment.
"Importantly, an equity stake in Ant Financial enables Alibaba and our shareholders to participate in the future growth of the financial technology sector", said Daniel Zhang, Alibaba Group CEO. The company also provides a wide range of financial services such as loans, wealth management and insurance products. The battle between the two big players Zomato and Swiggy just got more interesting with Zomato raising $200 million from Ant Financial. Inc. and Softbank Corp.More news: Star Wars: Battlefront II Underperformed Due to Microtransaction Controversy
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The funding round makes the food-tech company amply funded to compete with Softbank-backed Ola which recently acquired Foodpanda India.
Alibaba on Thursday also reported one of its best quarterly results with 56% year-on-year revenue growth.
Alibaba has announced its revenues rose 65% year-on-year, to US$12.8 billion, during the December quarter of 2017, urging the company to increase its estimates for 2018 performance.
"Our core business generated significant free cash flow of $7.1 billion during the quarter, enabling us to invest in New Retail, cloud computing, digital entertainment and globalization", said Maggie Wu, chief financial officer of Alibaba.
The company's New Retail initiative, which focuses on partnerships and innovation, pushed forward with the growth of the Hema grocery chain and a strategic alliance with Sun Art Group, which will equip 440 hypermarkets and supermarkets nationwide with omnichannel technology.
Alibaba also increased its FY18 guidance, forecasting revenue to grow between 55 and 56 per cent, up from the previous guidance of 49 to 53 per cent.