Zomato’s Journey
Zomato is an on-demand food delivery platform launched in 2008 with the name Foodiebay and is currently spread across 23 countries allowing individuals to order food or view various details such as ratings and reviews, ambience and their menu cards.
- 2012: Zomato expanded overseas and began offering its services in countries such as Sri Lanka, UAE, Qatar, South Africa, UK, Philippines and New Zealand, Turkey, and Brazil in 2013
- 2014: Zomato acquired Gastronauci, Poland’s restaurant search service, and Cibando, an Italian restaurant finder
- In 2015 Zomato made its biggest acquisition and acquired NexTable and Urbanspoon
Covid Impact
- Amid lockdown, Zomato laid off 520 employees (13%) and implemented salary cuts for remaining employees. By July their burn rate had sunk to $1-2 mn per month and delivery sales fell by 80%. This is just when global investors came knowing at their door with big cheques. Zomato and Swiggy were at their lowest while DoorDash and Uber Eats were at their peak during COVID, but Zomato played its cards right and acquired UberEats.
- On New Year’s Eve 2020, Zomato recorded the highest sales with a GMV of INR 75 crore and OPM of 4254.
- Two months after, DoorDash went public on NYSE in December, with a market capitalization over $60 bn, the same set of investors participated in Zomato’s fundraising round in February.
Expected IPO Details
As of February 2021, Zomato is valued at $5.4 bn
- As of March 2021, Zomato is expected to file for IPO this year. The IPO advisers for Zomato are Morgan Stanley, KotakMahindra Capital, Goldman Sachs and Credit Suisse
- Estimated to raise about $700-800 mm from its IPO, with IPO valuation pegged at $7-10 bn.
- Zomato’s IPO would mark a milestone in the Indian startup ecosystem,making it the first unicorn form India to get publicly listed. This might set the playbook for other venture backed internet companies in India planning to get listed in the domestic market.
- After the IPO, Zomato will be the most-valued company in the food service industry to be ever listed, surpassing Jubilant Foodworks($5.56 bn) and Westlife($1.06 bn).
- Over the past year, Zomato has roped in half a dozen new investors including Fidelity, D1 Capital, KoraManagement, MiraeAsset, SteadviewCapital, and Luxor Group. These firms have collectively bought close to a 20% stake in Zomato.
