Zomato gets $104 million: Plans for going public in 2021

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The food delivery major player Zomato, which has managed raised $104 million in a new round, have plans to go public sometime in the initial half of 2021, founder and CEO Deepinder Goyal stated in an internal mailing to their employees open September 10th 2020. Goyal wrote that they have raised lots of money, and now their money in the bank of almost $250 million is more than ever in their history. Their estimation is that their current round will end up with us at $600 million in the bank very soon.

Goyal also stated that the firm had no sudden plans on how to employ the money. They are considering this cash as a war-chest for the future M&A and fighting off any damage or price wars from their rivals in numerous areas of their business. The Chief Executive Officer appealed the burn rate was very reduced and that market share was speeding up in all regions. They are doing some of their best work without burning a hole in their money, and they should continue to do so as he told. Zomato’s EBITDA losses augmented slightly to $293 million in FY20 from $277 million in FY19 while the income went up 105 per cent to $394 million.

Regulatory filings obtained from business platforms Tofler and paper.vc presented that Zomato has raised a fresh `760 crores ($103.45 million) from Baillie Gifford, Tiger Global and Ant Financial as part of the series J financing round. A few other investors, such as Kora Management, are also likely to participate in this round. The previous week, the Gurgaon located company raised $62.44 million from existing investor Temasek and with the recent infusion, Zomato has currently raised some $1 billion. Competitor Swiggy has raised about $156 million in two tranches so far on this year and accumulated a total investment of $1.64 billion.

As we know how tough the business is, analysts calculate that only less than a handful of players will last. HSBC analysts predict that India’s food delivery could be valued at about $30 billion in the long term in a blue-sky situation. Delivery volumes, as they point out, are currently less than 1/20th of volumes in mainland China volumes. Furthermore, in terms of the market place and pure-play delivery, India remains mainly a delivery market, which has inferior margins than the marketplace model. In comparison, China’s Meituan derives 35 per cent of its volumes from the marketplace channel. Earlier this year, Zomato bought India Eats business from another rival Uber.

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