Zomato will go public by first half of 2021, as Tiger Global, others join financing round

Online food-delivery and restaurant discovery app Zomato has roped in New York-based Tiger Global as part of its current fundraising round, its co-founder and CEO, Deepinder Goyal, said in an email to employees, Thursday. Goyal added that the Gurgaon-based firm is on course to tap the public markets by mid of next year.

“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..” ET has reviewed the email sent by Goyal to employees.

On September 3, ET reported that Zomato has racked up around $250 million from new investors like Tiger and Kora Capital — in an ongoing funding round valuing the platform at around $3 billion, according to people aware of the development. While Temasek has invested $62 million, we reported earlier that $100 million each is expected to come from Tiger and Kora, a hedge fund focused on emerging markets. Separately, Entrackr, a news website reported that Zomato has received around $102 million from Tiger Global, as per filings made with the Registrar of Companies.

For Zomato, the new round of financing led by US and Singapore-based financial investors comes amid uncertainty surrounding the India strategy of its prominent backer — China’s Ant Financial. Alibaba’s sister company, Ant, which holds 25% in Zomato, had committed to investing $150 million in January. However, Zomato has been able to access only $50 million so far.

The changing stance by Chinese investors such as Ant comes amid a wave of anti-China sentiment sweeping across India and also globally, especially in the US. In addition, India’s new FDI rules introduced in April require regulatory approval for any investment from a country that shares a land border with the country.

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. The value of our business is going up dramatically, all thanks to the hard work and commitment of our team. We hope to create a lot of value for our current employees who have Esops sometime in the next year.”

Goyal further wrote, that Zomato’s burn rate had been reducing even as its market share has been accelerating in all regions. He added, ” We have no immediate plans on how to spend this money. We are treating this cash as a ‘warchest’ for future M&A, and fighting off any mischief or price wars from our competition in various areas of our business…”

Zomato has facilitated Esop sale of ex-employees worth $30 million or Rs 225 crore to investors, Goyal said. “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.

Zomato will go public by first half of 2021, as Tiger Global, others join financing round Zomato will go public by first half of 2021, as Tiger Global, others join financing round Reviewed by TechCO on 9/11/2020 Rating: 5

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