Zomato eyes IPO by first half of 2021 as Tiger Global, others join round

MUMBAI: Zomato has roped in New York-based investment fund Tiger Global as part of its current fundraising round, cofounder and CEO Deepinder Goyal said in an email to employees on Thursday.

The firm is on course to tap the public markets by mid-2021, Goyal added in the email, which ET has seen. “We have raised a lot of money, and today, our cash in the bank, around $250 million, is more than ever in our history. 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,” Goyal wrote.

“We have no immediate plans on how to spend this money. We are treating this cash as a ‘war chest’ for future M&A and fighting off any mischief or price wars from our competition,” he wrote.

Separately, Info Edge, one of Zomato’s early investors, said in a regulatory filing to the Bombay Stock Exchange that the company had raised $100 million from Tiger Global Management, and $60 million from Temasek Holdings, at a post-money valuation of $3.3 billion.

On September 3, ET reported that Zomato had racked up around $250 million from new investors like Tiger and Kora Capital — a hedge fund focused on emerging markets — in an ongoing round, valuing the platform at around $3 billion.

On the company’s IPO plan, Goyal wrote, “Our finance/legal teams are working hard to take us to IPO sometime in the first half of next year. We hope to create a lot of value for our current employees who have Esops sometime in the next year.”

Goyal said Zomato’s burn rate had been reducing even as its market share was accelerating in all regions. The monthly burn rate for July was under $1 million, he had said earlier. Zomato has said previously that it was clocking improved unit economics over the past 12 months, and its food delivery business had recovered to 80% of pre-Covid-19 levels.

Goyal also said that the company had facilitated the sale of Esops for ex-employees worth $30 million (225 crore) to investors. “That’s a lot of meaningful wealth creation we have enabled for our people. On an average, people sold their Esops at a 4x premium to what those shares were allotted to them back in the day,” he added.

Goyal said a number of former employees who had started up wanted to sell their shares. “Our IPO is around the corner and waiting a little longer will result in significantly more value creation for all of us.”

For Zomato, the new round comes amid uncertainty surrounding the India strategy of its prominent backer — China’s Ant Financial, which holds 25% in Zomato and had committed to investing $150 million in January. However, Zomato has been able to access only $50 million so far as new FDI rules introduced in April require regulatory approval for any investment from a country that shares a land border with India.

Zomato eyes IPO by first half of 2021 as Tiger Global, others join round Zomato eyes IPO by first half of 2021 as Tiger Global, others join round Reviewed by TechCO on 9/12/2020 Rating: 5

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