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Indian food delivery startup Zomato files for $1.1 billion IPO – TC

Indian food delivery startup Zomato on Wednesday filed for an initial public offering, becoming the first tech unicorn startup from the world’s second largest internet market to do so.

The 12-year-old Gurgaon-headquartered Indian startup, which counts Info Edge and Ant Group among its investors, plans to raise $1.1 billion from the IPO, it said in the filing. It intends to list on BSE and NSE, the stock exchanges in India.

Some key insights shared by Zomato in the filling:

  • Zomato has claimed market leading position in the food delivery market.
  • The startup identified Prosus Ventures-backed Swiggy (which is in talks to raise capital from SoftBank Vision Fund 2), as well as restraunts such as Domino’s, McDonald’s and Pizza Hut and cloud kitchen operators such as Rebel Foods as its competitor. (But not Amazon, which entered the food delivery market last year.)
  • The startup clocked $183.6 million in revenue between April 1 and December 31. Its losses during this period were $91.8 million.
  • The startup said it has a history of net losses, and it anticipates increases expenses in the future.
  • Info Edge, one of the biggest investor of Zomato, plans to sell stake worth $100 million, the investment firm said in a filing.
  • Zomato has identified “changing regulation in India,” ability to raise foreign capital, and “political changes” among over a dozen risk factors.
  • The startup, which employs 3,469 people across the globe as of December 31, plans to grow its Zomato Pro membership offering, which allows customers to avail additional benefits, and Hyperpure, its B2B supplies business, and deepen its relationship with restaurant partners in the foreseeable future.
  • Zomato says by third quarter last year, going by the metric GOV (gross order value), the startup had recovered from the Covid crisis. But some of its business lines including dining-out business is “still recovering as customers continue to be reluctant to dine-out as a precautionary measure.”
  • As of December 2020, the startup had 161,637 active delivery partners, 350,174 active restaurant listings on the platform, of which 132,769 restaurants were also those who actively delivered to customers.
  • Zomato’s advertising and sales promotion expenses as percent of its total income:
  • Zomato says it has improved the unit economics of food delivery business in recent years.
  • Zomato has raised over $2.2 billion, according to research firm Tracxn. The startup is valued at $5.4 billion. The startup last year acquired Uber Eats’ India business, and as part of the deal gave the American ride-hailing firm 9.9% stake in Zomato. Its current list of shareholders, assuming at least 1% of the business, stands as following:

This is a developing story. More to follow…

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