Zomato Gets Ready For 2021 IPO, Appoints Legal Advisors

Indian foodtech unicorn Zomato, which has planned its IPO in 2021, is looking to hire bankers and has brought in Cyril Amarchand Mangaldas and Indus Law as legal advisors.

In September, Gurugram-based Zomato had raised $102.5 Mn from US-based investment firm Tiger Global Management. Previously, it has already raised $62 Mn funding from Singapore-based state investment arm Temasek through MacRitchie Investments.

If Zomato’s IPO goes per plan, then it will join the bandwagon of MakeMyTrip which got listed in 2010 and Info Edge India Ltd, which was listed on BSE in 2006.

According to a Moneycontrol report, Zomato has appointed Kotak Mahindra Bank as the lead merchant bank for the proposed IPO.

Earlier this year, Zomato facilitated ESOP sale of ex-employees worth $30 Mn to investors, CEO and cofounder Deepinder Goyal had said. “That’s a lot of meaningful wealth creation we have enabled for our people. On an average, people sold their ESOPs at a 4x premium to what those shares were allotted to them back in the day,” he wrote in a mail to his employees.

In terms of financials, Zomato reported a strong revenue performance in FY 2020, growing 105% from the previous year. Over the same period, however, the company’s losses grew by 47%. In the first quarter of 2020-21, the current fiscal year, the company’s earnings stand at $41 Mn while the losses stand at $12 Mn. 

Launched in 2008, the company currently operates in 11 countries and serves almost 48 Mn customers every year. Out of these 48 Mn customers, India makes up for a whopping 23 Mn, whereas the other 10 countries account for 25 Mn orders.

Almost 35 startup unicorns in India and a few of them are chasing IPOs. What’s more pressing is that for many, the losses still run in millions of dollars. Out of the 30 major unicorns in India, only nine are EBITDA positive. These include ReNew Power, Zoho, Info Edge, Mu Sigma, BillDesk, BYJU’S, Freshworks, Icertis, and Druva.