Food delivery platform Zomato is set to become the first startup to get listed in the Indian market. The company will open its Initial Public Offering (IPO) on July 14, and will close it on July 16.
Zomato is planning to raise Rs 8,250 crore and offering Rs 72-76 per share with multiples of 195. The Ant Group-backed food ordering platform has seen significant growth in the last few years with Zomato and Swiggy competing head-on to grab market share.
Zomato's FY20 revenue had jumped over two-fold to $394 million (around Rs 2,960 crore) from the previous fiscal, while its earnings before interest, taxes, depreciation and amortisation (EBITDA) loss was around Rs 2,200 crore.
Zomato started as a restaurant discovery portal but regularly pivoted throughout its journey. It started from expanding through international markets to then focusing on India and adding several other revenue streams within the India offering.
In February, Zomato had raised $250 million (over Rs 1,800 crore) in funding from Tiger Global, Kora and others, valuing the online food ordering platform at $5.4 billion (around Rs 40,000 crore).
Deepinder Goyal’s Zomato’s success story can be measured through various points. Firstly, it comes with multiple revenue streams around the food and delivery business and serves as a consolidated business unit. Next in line is that the company keeps large sums of cash which in turn provides immense growth and similarly keeps the fixed cost for the business relatively stable.
The third and the most important point is that Zomato never rolled out a blanket free delivery model which in turn resulted in making their unit economics robust.
COVID-19 Pandemic Acting As A Catalyst
The COVID-19 pandemic disrupted the lives of many but it worked in favour of Zomato as the company took serious measures and that eventually led the company to up their game and further increase the market share.
During the pandemic, they came up with grocery delivery, contactless delivery, face masks to all delivery partners and lastly disabling cash on delivery (COD).
This agility to pivot to cater to consumers during pandemic needs seemed to have reaped huge dividends for the 13 years old startup.