Zomato’s Investors Won’t Exit In $1 Bn IPO, Says Founder Deepinder Goyal

Indian foodtech unicorn Zomato is expected to raise $750 Mn to $1 Bn through its planned Initial Public Offering (IPO) this year. 

According to ET, which first reported the development, the amount will be raised without any investor exiting or selling their shares in the company. 

The company’s cofounder and CEO Deepinder Goyal reportedly told employees this week that the IPO will most likely be a 100% primary offering. 

“No existing shareholder is willing to sell any shares in our IPO… People think that Zomato will be a $50 billion company in five years (I hope) and it will be unwise to sell shares right now,” Goyal reportedly said at a recent town hall.

Last month, the Gurugram-based food aggregator increased its paid-up capital by 3x in preparation for raising funds in the near future. The company’s paid-up capital has increased from INR 535 Cr to INR 1,448 Cr.

In February itself, Zomato raised $250 Mn in funding from existing investors Tiger Global, Kora and others, which brought the valuation of the food delivery unicorn to over $5.4 Bn.

Zomato is expected to go public in June. The company plans to list itself in India, however, it could also look at listing overseas. Meanwhile, media reports also suggest that Zomato is looking at a $6 Bn-$8 Bn valuation through the IPO.

The February round brought the total funding for Zomato to over $2.1 Bn. In December, Zomato had closed a $660 Mn round with 10 new investors joining the company’s cap table, including Tiger Global, Kora Capital, Luxor, Fidelity (FMR), D1 Capital, Baillie Gifford, Mirae, and Steadview.

Zomato saw its loss increase 161% to INR 2,451 Cr in the fiscal year ending March 31, 2020, from INR 940 Cr in 2019. In FY20, Zomato saw its revenue increase 84% year-on-year to INR 2,486 Cr. The filings mention that the primary revenue source for the company is through ad sales, online ordering and Zomato Gold (now called Zomato Pro) business segments. Revenue from operations stood at INR 2336 Cr, while other income came in at nearly INR 150 Cr for the year.

Besides Zomato, other Indian startups such as Droom, Grofers, PolicyBazaar and Flipkart are also expected to go public this year. 

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