Zomato Beefs Up Valuation Prior To IPO In Its Latest Fundraising Round!

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Zomato Beefs Up Valuation Prior To IPO In Its Latest Fundraising Round!

Before heading to the stock market with an IPO, the homegrown food delivery startup Zomato beefs up...

Before heading to the stock market with an IPO, the homegrown food delivery startup Zomato beefs up its valuation by raising a whopping $250 million as an investment.

According to a regulatory filing by one of Zomato’s earliest investors Info Edge, the latest round of investment raised by the food-tech giant has been led by Tiger Global, Kora Management, Fidelity Management, Dragoneer Investment Group and Bow Wave Capital Management.

After the latest round, Zomato has so far raised a total of $21. billion in 20 rounds of investment.

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Post the recent and latest investment round, now Zomato’s valuation has soared all the way up to $5.4 billion from its previous figure of $3.6 billion. Note here that Zomato participated in three major fundraising events in 2020 as well – in what is pegged to be a pre-IPO round.

Source: BI

Post this latest round of Zomato, Info Edge’s stake has been diluted all the down to 18.4%. Founded in the year 2008, Zomato is on its way to becoming one of the first startups in India to head for an IPO.

According to a media report from last year, Co-founder and CEO of Zomato Deepinder Goyal, in an email to his employees, mentioned how the company is looking forward to getting listed publicly in H1 2021.

Currently, the food-tech startup, which acquired the food delivery business of Uber in India last year, competes with Bangalore based Swiggy which is valued at $3.6 billion.

In 2020, a third major player – Amazon has also made its entry in the food delivery space of India. But, as of now, their operations are limited to Bangalore only the ecom-giant’s food delivery arm testing the waters before expanding further.

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All the 3 major players are gunning to dominate the $12 billion Indian food delivery market, estimated by analysts at Bernstein. In a report to its clients, Bernstein analysts wrote how 50% of the market share currently belongs to the IPO-bound Zomato.

The food-tech industry in India is booming and very well positioned to sustain growth as unit economics keep improving. According to a recent report by analysts at Bank of America, take-rates at 20%-25% are one of the highest in the country and consumer traction is continually increasing as well.

Both Zomato and Swiggy have rapidly improved their finances in recent years – an incredible feat given the food delivery landscape, unlike Western markets where the value of each delivery item is about $33 or more, carries a tag of only $3-4.

India food-tech unicorn Zomato posted an impressive 84% increase in revenue to Rs 2,486 Cr in FY’20 ending March 2020. However, the losses also ballooned by 161% to Rs 2,451 Cr.

Depinnder Goyal, in an earlier blog, wrote how Zomato faced the test of times in the pandemic-ridden 2020 but it also brought the company closer to profitability. He mentioned how in terms of the business size, COVID-19 set Zomato back by a year or more but that is but a small blip when one is building a company for the next 100 years.

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