Zomato plans IPO in ’21, ex-staff get $30m cashout

Madhav.Chanchani@timesgroup.com
Bengaluru: On-line restaurant discovery platform Zomato has began preparations to go for an preliminary public providing (IPO) in 2021, making it the primary amongst India’s most valued shopper web corporations, or unicorns (valued at over $1 billion every) to plan a market debut. The 12-year-old firm, co-founded by IIT-Delhi engineer and former Bain advisor Deepinder Goyal, is planning its itemizing in India, stated sources aware of the matter.
Within the run-up to its public providing, the Gurgaon-based firm can also be within the strategy of closing a $30-million share sale for its former staff, which might be some of the vital ESOP liquidity occasions in India. Zomato is within the strategy of elevating its pre-IPO spherical of $600 million, as part of which it raised $100 million from Tiger World. Earlier than that, it raised near $150 million from Singapore’s Temasek, China’s Ant Monetary and UK-based Baillie Gifford. The corporate’s valuation is predicted to cross $3.5 billion with the brand new spherical, if it closes.
“Our finance/authorized groups are working arduous to take us to IPO a while within the first half of subsequent 12 months. The worth of our enterprise goes up dramatically, all because of the arduous work and dedication of our workforce,” stated Goyal in a mail to firm staff.
Whereas the preliminary begin of the lockdown in March-April on account of Covid-19 hit revenues of Zomato and rival Swiggy arduous, the corporate stated final month meals supply has recovered 75-80% of its pre-pandemic gross sales, whereas eating in at eating places continues to be at simply 8-10%. However on the similar time, it has reduce month-to-month losses from $45 million in March 2019 and $20 million in October 2019, which got here right down to $1.5 million in June this 12 months.
The corporate stated it doesn’t have any instant plan for the money it has raised.
“We’re treating this money as a ‘war-chest’ for future M&A, and preventing off any mischief or value wars from our competitors in numerous areas of our enterprise,” Goyal informed staff within the mail. Prior to now, Zomato and Prosus Ventures-backed Swiggy have held discussions for a merger, however talks haven’t progressed.
A number of Indian web corporations like classifieds proprietor Data Edge, which additionally owns a 25% stake in Zomato, apart from on-line journey portal MakeMyTrip and business-to-business commerce portal IndiaMart — not one of the extremely valued unicorns — have until now gone for a list. In July, on-line monetary providers portal PolicyBazaar had reportedly stated it plans an IPO by September 2021. Earlier than the pandemic, corporations like ride-hailing big Ola and e-commerce main Flipkart had talked about an IPO by 2021 and 2022, although the standing of these plans shouldn’t be clear.
“The pandemic has helped corporations with resilient enterprise fashions get away much more quickly. Whereas many corporations took a short-term hit, some have bounced again quick and with improved economics. Zomato has been sharing its annual monetary report regardless of being a privately held firm by each ups and downs — their tradition of transparency is really commendable,” stated Tarun Davda, MD at enterprise capital agency Matrix Companions India, which has backed corporations like Ola, Dailyhunt, Razorpay and 5 Star Finance.

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