Indian food delivery system Zomato has been cut off from its biggest Chinese investor in the first major example of how Delhi’s new foreign investment laws have hit funding.
In January, Zomato announced it had secured $150m in fresh funding from Ant Financial, the Chinese digital payments giant, Financial Times reported.
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But it has been unable to access $100m of that total, according to two people with direct knowledge of the situation.
In April, Centre announced that it would block “opportunistic takeovers” by requiring official approval for any investment from a country that shares a land border with India.
In recent years, Indian start-ups have depended on significant funding from Chinese investors, including Tencent and Alibaba, which is Ant Financial’s sister company.
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But a wave of anti-China sentiment, particularly following a violent clash between troops from the two countries at Galwan Valley in Eastern Ladakh, has hurt both Chinese companies operating in India and Indian start-ups with Chinese backers.
Zomato employees in Kolkata made headlines this week when they burnt their T-shirts to protest the violence and Chinese investment in the company.