Zomatos IPO Likely In The First Half Of 2021

Daniel Fowler
September 13, 2020

Zomato had in fact raised $150 million (about Rs. 1,100 crores) at the start of the year from Ant Group - affiliated with Alibaba - but it faced trouble in getting all of that investment after the Indian government imposed new FDI regulations on countries that share a land border with India. Info Edge, a major investor in Zomato, confirmed the development Thursday evening, adding that the new round valued Zomato at $3.3 billion post-money.

The Gurugram-based foodtech company had closed $62 million (Rs 456 crore) from Singapore's state investment arm Temasek Holdings in the first tranche earlier this month.

Goyal also said that the company had facilitated the sale of Esops for ex-employees worth $30 million (225 crore) to investors. The investors are part of a $525 million round that, as per a filing with India's company regulator, values the startup at $3.4 billion.

The online food delivery segment has seen significant growth in the last few years with Zomato and Swiggy competing head-on to grab market share.

Deepinder Goyal, Founder and CEO, also addressed to his employees in a mail that "We have raised a lot of money, and today, our cash in the bank (~$250m) is more than ever in our history".

"Our finance/legal teams are working hard to take us to IPO sometime in the first half of next year", he said adding that "the value of our business is going up dramatically, all thanks to the hard work and commitment of our team".

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"There are more big names joining the round - we estimate that our current round will end up with us at $600 million in the bank very soon", Goyal wrote in an internal letter. The 12-year-old company, co-founded by IIT-Delhi engineer and former Bain consultant Deepinder Goyal, is planning its listing in India, said sources familiar with the matter. The company said it does not have any immediate plan for the cash it has raised. During this time, Zomato and Swiggy also ventured into the area of grocery delivery.

With regard to current employees not being able to sell their stock options, he said, "Our IPO is around the corner and waiting a little longer will result in significantly more value creation for all of us".

If we talk about finances, Zomato has doubled its revenue to $394 million in 2019-20.

Despite the uncertainty in the current market, analysts said that these losses wouldn't impact Zomato's IPO aspirations.

The investment comes at a time when the food delivery startup reinvents parts of its business as it grapples with the economic fallout from the COVID-19 pandemic.

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