Zomato is planning to go public by filing for an Initial Public Offering (IPO) in the first half of 2021, CEO Deepinder Goyal told some employees in an email on Thursday. “We hope to create a lot of value for our current employees who have esops sometime in the next year,” he said.
In addition to this, Goyal said that they have raised money from Tiger Global, Temasek, Baillie Gifford and Ant Financial in their current round, and more names will be joining. In the email, Goyal said he estimates with their current round, Zomato will have $600 million. In terms of their current cash, Goyal said the company had around $250 million in the bank.
“The best part is that our burn rate is very low, and our market share is accelerating in all regions. We are doing some of our best work without burning a hole in our pocket, and we should continue to do so,” he said.
While Goyal didn't disclose who invested how much, Entrackr reported on Thursday that Tiger Global Management has put in Rs 760 crore ($102.5 million) in Zomato, and $62 million from Temasek. ET reported that the company may soon also see investment from Kora Capital. This round has valued the company at $3 billion, the report said. Kora is also pumping around $100 million, reports say.
ET said that Tiger Global may put in $100 million more if pre-COVID business volumes return.
In his letter to employees, Goyal said that they have no immediate plans on how to spend the money. “We are treating this cash as a ‘war-chest’ for future M&A, and fighting off any mischief or price wars from our competition in various areas of our business,” he said.
He also spoke about ex-employees of the company wanting to sell their stock options in Zomato, and that former employees have sold around Rs 225 crore worth of shares to investors. “On an average, people sold their esops at a ~4x premium to what those shares were allotted to them back in the day,” he said.
With regard to current employees not being able to sell their stock options, he said, “Our IPO is around the corner and waiting a little longer will result in significantly more value creation for all of us. Unlike our ex-employees many of whom are doing their own start-ups and needed urgent liquidity in the middle of a pandemic, we can definitely wait for some more time for a higher upside.”