#InTheSpotlight: Zomato – the first Indian unicorn to go public

The foodtech unicorn launched its initial public offering (IPO) on July 14, 2021.

Founded as a food listing platform ‘Foodiebay’ in 2008 and later renamed as ‘Zomato’ in January 2010, the 13-year-old company achieved a milestone today – becoming the first Indian unicorn to go public.

This is the Gurugram-based food tech unicorn’s incredible journey.

How it began

While working together at Bain Consulting, IIT graduates Deepinder Goyal and Pankaj Chhadah banded together for a common goal: to improve how Indians discovered and consumed food. The initial idea, according to an Inc42 report, was to allow customers to find food near their location and to also have the ability to leave reviews.

When the startup was launched some 13 years ago, the internet penetration rate in the country was less than 5%. Most restaurants were promoting themselves through flier menus and customers were having to scan through physical menus to place orders.

The two young graduates wanted to ease this experience and thus launched Foodiebay, a platform where restaurant menus were made available online.

The journey

After two years of being bootstrapped, the company got its seed funding worth Rs 4.7 crore from InfoEdge and rebranded itself as Zomato.com with the idea of expanding the platform’s areas of operations beyond the food and restaurant listings portal and entering the nightlife listing business.

In an interview to YourStory, co-founder Goyal said:

“We saw that if we wanted to touch broader horizons then the name Foodiebay wouldn’t be the best choice as it constraints our perception to one of a food website.”

A year down the line, the company launched online ticketing and expanded to Delhi-NCR, Bengaluru, Pune, Mumbai, Kolkata, and Chennai, and received its Series A funding of $3.5 million from InfoEdge. A year later, the existing investor again led a funding round worth $2.3 million.

Zomato goes international

The startup hit a major milestone in 2012 when it went international, expanding its operations in UAE, Sri Lanka, Qatar, UK, Philippines, and South Africa and also launched its own app on Android and iPhone.

Soon after, two major funding rounds happened in 2013: $16.7 million from InfoEdge and another $37 million from Sequoia Capital and InfoEdge. And in 2014, it raised another $60 million from Vy Capital, Info Edge, and Sequoia.

Interestingly, the startup did not launch food delivery until 2015 when its rival Swiggy entered the market. This was a turning point for Zomato since it addressed the most significant bottleneck for both restaurants as well as consumers. The same year, the company got a funding round of $50 million from Info Edge, Vy Capital, and Sequoia Capital.

Three years on, in 2018, soon after the company raised $150 million from Ant Financial, Alibaba’s payment affiliate, co-founder Chhadah announced his exit.

Unicorn dream fulfilled

A major milestone happened for the startup in October of the same year when it raised another $200 million from Ant Financial at a valuation of $1.1 billion – the company became a unicorn.

A year after Chhadah’s exit, the company’s COO Gaurav Gupta was elevated to a co-founder role in 2019.

In 2020, the company acquired UberEats and raised $62 million from Temasek and another round of $52 million from Kora. The same year, Mohit Gupta was also elevated to the co-founder role.

Road to IPO

Earlier this year, the company raised $250 million and made a $100 million investment in Grofers and thus acquired a 9.3% stake in the e-grocer. The unicorn also elevated Akriti Chopra to the co-founder role.

It began planning for its initial public offering (IPO) in September 2020, and today, July 14, 2021 – 4 days after the company’s turned 13 – Zomato became the first Indian unicorn to go public.

Its Rs 9,375-crore IPO opened at 10 am and will be available for subscription till Friday, July 16, 2021.

Amanat Khullar is the Content and Editorial Manager at ADIF.

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