Zomato, an India-based food delivery service, will file to go public sometime this month. According to several of the company’s sources, its future IPO could raise around $650 million. The sources—who asked to remain anonymous—added that Zomato could go public as soon as this September; they also said that deliberations on the size of the IPO and an upcoming timeline are ongoing, but could change at any point.
Company CEO and co-founder Deepinder Goyal first announced Zomato’s plans to IPO last year via an email to employees; he added that Zomato would look into merger and acquisitions as well. In addition, the company raised $212 million from Tiger Global Management, MacRitchie Investments, a unit of Singapore’s Temasek Holdings, Ant Global, and Baillie Gifford in preparation for its filing.
In December, Zomato revealed that it had secured a total of $660 million through its Series J funding round. Additional participants included Kora, Luxor, Fidelity (FMR), D1 Capital, Mirae Asset Venture Investment and Steadview Capital; the round also gave Zomato a a post-money valuation of $3.9 billion.
The company was founded in 2008; it started out as Foodiebay, later changing to Zomato Pvt Ltd. in 2010. It operates as an online restaurant guide and food ordering platform that allows users to order meals from restaurants and have them delivered. Customers are also able to leave reviews and make reservations to eat at available restaurants.
First launched in Delhi, Zomato soon expanded to other parts of India like Mumbai, Bengaluru, Chennai, Pune, and Kolkata. By 2015, it had expanded to several countries outside of India; the list includes Ireland, the United Arab Emirates, the United Kingdom, Turkey, Brail, New Zealand, the Philippines, South Africa, Canada and several more.
After acquiring the app Urbanspoon in 2019, Zomato was soon able to enter the United States and Australia markets; the acquisition helped put it in competitive spots with companies like Yelp and Foursquare. The company also acquired Uber’s UberEats services in India in 2020, merging UberEats users with Zomato’s.
Due to the COVID-19 pandemic, the company laid off 520 employees in advance of an economic downfall. Although, it made a move to expand its business to contactless dining, as well as grocery delivery (Zomato Market) to over 80 cities in India; in September, Zomato announced that it would scale back on Zomato Market, but the service would still continue its operations.
As Zomato prepares for its IPO, it may run into a bit of local competition. After acquiring the India branch of UberEats, the company’s market share rose by 55 percent, surpassing that of Swiggy, another on-demand food delivery platform.
In addition, Amazon entered the food delivery market in India last year, currently only running in Bengaluru. According to Quartz India, Amazon’s marketing campaigns, logistics network and free delivery for Amazon Prime members could shake up potential IPO plans; even for non-Prime members, the company charges 19 Indian Rupees (~26 cents) as opposed to 20-100 Rupees from fellow competitors.