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India’s Food Delivery Unicorn Zomato Files For $1.1 Billion IPO

Indian food delivery group Zomato has filed an initial public offering that aims to raise up to 82.5 billion rupees ($1.1 billion).

The Gurgaon-based company plans to list on the Indian stock exchanges NSE and BSE. Although the prospectus did not disclose the price of the shares, the $1.1 billion fundraising target would make Zomato’s IPO the biggest in India so far this year, according to a Bloomberg report.

The startup was valued at $5.4 billion after a $250 million funding round led by Tiger Global, Kora and others in February 2021. Zomato attained it unicorn status back in 2015.

“As lockdowns in response to the Covid-19 pandemic eased in India towards the end of May 2020, our food delivery business started recovering and in the third quarter of fiscal 2021,” Zomato wrote in the prospectus. “We recorded the highest GOV (gross order value) achieved by us in any quarter till December 2020.”

Zomato reported that its business bounced back in August. The company said the number of restaurants doing food delivery had reached 70% of pre-pandemic levels.

But Zomato’s prospectus also warned investors that it’s like to remain unprofitable in the near future. “We have a history of net losses and we anticipate increase expenses in the future,” the prospectus said.

In the nine months ended December 2020, Zomato recorded a net loss of about $92.1 million amid the Covid-19 pandemic. The firm had to lay off 13% of its staff and impose salary cuts in May after a nationwide coronavirus lockdown hit its business. 

Zomato was founded in 2008 by Deepinder Goyal and Pankaj Chaddah as a food discovery and ratings platform. Chaddah left the company in 2018. The enterprise is now one of India’s leading restaurant aggregators and food delivery service providers.

It serves 526 cities across India with more than 350,000 active restaurant listings as of December 2020. The firm has also expanded its business to 23 foreign countries. 

Zomato counts Ant Group, Uber, Temasek, YV Capital and Sequoia Capital, among its investors.

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