Zomato’s IPO could make the company as valuable as one of its biggest investors – Info Edge

BI India
  • While Zomato has a $3.5 billion valuation now, analysts at HSBC peg the valuation to hit $5 billion – which makes Zomato almost as big as its investor – Info Edge.
  • Info Edge is a profitable company while Zomato continues to be in losses.
  • However, it is worthy to note that the 12-year old Zomato boasts of double the revenue figures as compared to that of 25-year old Info Edge.
Zomato – India’s big foodtech unicorn – had recently got everyone’s attention with its latest funding rounds, and the gaze on the startup doubled as it was known to be a pre-IPO round. Zomato’s imminent listing sheds light on another company – its first and one of the biggest investors Info Edge.

While Zomato has a $3.5 billion valuation now, analysts at HSBC peg the valuation to hit $5 billion – which makes Zomato almost as big as its investor – Info Edge. Info Edge owns a 22.71% stake in Zomato and has been one of the earliest backers of the foodtech unicorn.

One of India’s first internet companies Info Edge is inching closer to a market capitalisation of $6 billion (stood at $5.9 billion on Sept 11 morning) and runs four internet companies – Naukri.com, 99acres.com, Jeevansaathi.com and Shiksha.com.

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Interestingly, both the companies could see similar valuations even while Zomato’s business continues to be deep in the red, while Info Edge is one of few profitable online businesses. However, it is worthy to note that the 12-year old Zomato boasts of double the revenue figures as compared to that of 25-year old Info Edge.

BI India/Flourish

Meanwhile, Info Edge recently released its Q1 earnings and its revenue was down by 10.4% at ₹280.1 crore. However, the company’s businesses had been growing significantly until the pandemic struck. In FY20, Info Edge had posted a net profit of ₹200.8 crore.

Info Edge’s revenue from different verticals (in ₹ mn)
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Info Edge FY16FY17FY18FY19FY20
Recruitment5,290 5,953 6,688 7,8589,068
Matrimonial 476 580 687 723 847
Real Estate1,083 1,122 1,354 1,920 2,280

In an earlier interview with Business Insider, Hitesh Oberoi, CEO of Info Edge had said, “We had invested in Zomato, when it wasn’t even called so. It was called foodiebay then. When we had started investing, there was no SoftBank – we were in the mindset to start investing in businesses that we understand.”

Talking about startups going the IPO way, Oberoi had said, “What everyone is waiting to see is how fast these businesses can get to profitability. It’s clear they are solid businesses, services we love. The question is not whether they are here to stay and what is the right value which will be determined through an IPO.”

Zomato’s fundraising

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According to reports, Zomato CEO Deepinder Goyal in an email to his employees said that the company is looking to list publicly in the first half of 2021. Goyal also spoke about the company’s funding and said that the company has $250 million in the bank and as their current round wounds up they will have $600 million.

The news came as Zomato raised $102.5 million from Tiger Global Management at a $3.4 billion valuation.

Zomato: Fundraising in 2020

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Tiger Global$102.5 million
Temasek$62 million
Pacific Horizon Investment Trust$5 million
Ant Financial$150 million

The success or failure of Zomato’s IPO will also have a bearing on Swiggy

The IPO will lead to the discovery of value for Swiggy, which was valued at $3.6 billion as of its last fund raise in April 2020.

While Zomato had done away with one competition with its acquisition of UberEats in January 2020, the online food delivery segment is in focus once again as the likes Amazon too have entered the space. According to a Redseer report, India’s total online food delivery gross merchandise value (GMV) is expected to be $13 billion by 2024 while clocking 12 million daily orders on an average.
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SEE ALSO:

Zomato gets over $100 million from Tiger Global – valuation could hit $3.4 billion

Flipkart says it has onboarded 50,000 kirana stores for the festive season

BYJU’S funding streak continues – valuation hits $10.8 billion with fresh funds from Silver Lake

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