Zomato is preparing to go public. In an email to employees that has been seen by commerce day-to-day Mint, Zomato founder and CEO Deepinder Goyal said that the restaurant aggregator and food delivery app used to be aiming to dossier and glide an IPO (initial public offering) by mid-2021. This comes in the wake of Zomato raising $102.5 million (more or less Rs. 750 crores) from New York-headquartered hedge fund Tiger Global Management that drives Zomato’s valuation to $3.4 billion (approximately Rs. 25,000 crores).
“We have raised some huge cash, and today, our cash in the bank (~$250 million) is more than ever in our history,” Goyal wrote in an email to employees, Mint reports. “Tiger Global, Temasek, Baillie Gifford, and Ant Financial have already participated in our current round, and 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.”
“The most productive part is that our burn rate is very low, and our market share is accelerating in all regions. […] We don’t have any instant plans on how to spend this money. We are treating this cash as a ‘war-chest’ for future [mergers and acquisitions], and fighting off any mischief or price wars from our competition in quite a lot of areas of our commerce.”
Zomato announced its late stage Series J underwriting round — the “current round” that Goyal refers to — earlier this year. It has since raised $5 million (more or less Rs. 37 crores) from Edinburgh-based Pacific Horizon Investment Consider, when Zomato used to be valued at $3.25 billion (more or less Rs. 23,900 crores). Zomato added to that in August with Singapore-based Temasek-owned MacRitchie Investments contributing $62 million (more or less Rs. 455 crores).
The infusion of $102.5 million from Tiger Global makes it the largest fund raise for Zomato in 2020. Zomato had in truth raised $150 million (approximately 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.
Tiger Global’s investment gives it a 3.01 percent stake in Zomato. Goyal remains the biggest individual stakeholder in Zomato with a 7.7 percent stake.
Zomato’s new $3.4 billion valuation brings it closer to its biggest rival, Swiggy, final valued at $3.6 billion (approximately Rs. 26,400 crores).
But even as it’s brought in more cash and inflated itself, Zomato has also laid off employees and halved salaries for the rest, amidst the ongoing coronavirus pandemic.