Zomato, Swiggy call claims of antitrust probe by CCI as ‘misleading’
Zomato addressed the claims of the antitrust investigation by the Competition Commission of India (CCI) into its business practices, and called them “misleading”.
Online restaurant discovery and food ordering platform Zomato has started preparations to go for an initial public offering (IPO) in the first half of 2021. In an e-mail addressed to employees that have been seen by the PTI, Zomato founder and CEO Deepinder Goyal said, “Our finance/legal teams are working hard to take us to IPO sometime in the first half of next year.”
“The value of our business is going up dramatically, all thanks to the hard work and commitment of our team. We hope to create a lot of value for our current employees who have ESOPs sometime in the next year,” he added.
The IPO is around the corner and waiting a little longer will result in significantly more value creation for all, he added.
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The latest announcement comes at a time when the company raised $102.5 million from New York-headquartered hedge fund Tiger Global Management that gave a boost to Zomato’s valuation to $3.4 billion (around 25,000 crore).
Talking about the company’s fund raising, he said, “We have raised a lot of money, and today, our cash in the bank (around USD 250 million) is more than ever in our history.”
“Tiger Global, Temasek, Baillie Gifford, and Ant Financial have already participated in our current round, and there are more big names joining the round — we estimate that our current round will end up with us at $600 million (around Rs 4,400 crore) in the bank very soon,” he added.
The best part is that Zomato’s burn rate is very low, and its market share is accelerating in all regions. The company is doing some of its best work without burning a hole in its pocket, and it should continue to do so, Goyal said.
“…. we have no immediate plans on how to spend this 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 added.
Zomato’s new $3.4 billion valuation brings it closer to its competitor Swiggy, which last valued at $3.6 billion (about Rs. 26,400 crores).
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