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ETSA 2024 | Zomato’s top ranks needed a spring clean after IPO highs: cofounder and CEO Deepinder Goyal

Economic TimesEconomic Times · 9m ago
ETSA 2024 | Zomato’s top ranks needed a spring clean after IPO highs: cofounder and CEO Deepinder Goyal
Medial

- Zomato CEO Deepinder Goyal opened up about the company’s journey from a $7.6 billion listing to a $29 billion market cap. - Goyal shared that there was a period of complacency within the company after the IPO, and he had to remove individuals who had lost their drive and reboot the organization. - He revealed that his lowest lows as a founder occur when people he trusts don't show up, which feels more personal than business. - Zomato's most challenging moment was when rival Swiggy raised $1 billion while they only had $35 million in the bank. - The decision to enter the delivery and quick commerce businesses was driven by survival instinct, as these moves were necessary for the company's continued existence. - Goyal discussed the diversification of Zomato, including its spin-off app District for events and dining out, acknowledging that they face competition from established players such as BookMyShow.

Zepto raises $340 Mn at $5 Bn valuation

EntrackrEntrackr · 10m ago
Zepto raises $340 Mn at $5 Bn valuation
Medial

Quick commerce company Zepto has raised $340 million in a follow-on financing round led by General Catalyst, with Dragon Fund and Epiq Capital joining as new investors. Existing investors, including StepStone, Lightspeed, DST, and Contrary, also increased their stakes. With this new funding, the company’s valuation has surged by nearly 40%, rising to $5 billion from $3.6 billion in June, when it raised $665 million in its Series F round. Zepto, has raised over $1 billion in 2024, $1.2 billion in the past 12 months, and more than $1.5 billion since its inception. “The rationale behind this follow-on financing was twofold,” said Aadit Palicha, co-founder and CEO of Zepto. “First, the opportunity to bring on a lead investor of Neeraj Arora’s caliber from General Catalyst was one we couldn’t pass up. Second, strengthening our balance sheet is a strategic move, especially as the company continues to deliver robust growth and operating leverage.” Zepto serves millions of customers by delivering over 10,000 products across various categories within 10 minutes through a network of delivery hubs nationwide. The Mumbai-based firm claims it has nearly achieved EBITDA positivity with 140% year-on-year growth and an annualized gross merchandise value of over $1 billion (Rs 8,300 crore). As of May 2024, it also reports that about 75% of its stores are fully EBITDA positive. In FY23, Zepto registered a 14-fold increase in revenue to Rs 2,024 crore, though its losses widened to Rs 1,272 crore. The quick commerce sector is becoming increasingly competitive with Flipkart’s recent entry and BigBasket’s full shift to rapid delivery. Additionally, e-commerce leader Amazon is expected to join the market early next year. Currently, Zomato-owned Blinkit has emerged as top player in the quick commerce followed by Swiggy Instamart, Zepto and Tata Digital-owned BigBasket.

uEngage aspires to be Shopify for restaurants in India

EntrackrEntrackr · 1y ago
uEngage aspires to be Shopify for restaurants in India
Medial

If you’re a new restaurant owner, you will probably get your joint listed on Zomato and Swiggy at the earliest. The listing helps with instant discoverability in the operational area and access to the delivery fleet among other benefits. The catch, however, is the steep commission charges restaurant owners have to pay these food aggregator platforms. This is one of the reasons why you see different pricing on Zomato and restaurants’ own menu cards. Chandigarh-based uEngage is looking to fix this exact problem for restaurant owners in the country. The startup offers a wide range of services such as Edge (which lets you start your own ordering app), Flash (which helps manage deliveries and riders), and Prism (which helps automate marketing). The startup is also active on ONDC, enabling businesses to join the open network for digital commerce. We spoke to uEngage CEO and founder Sameer Sharma to learn more about his platform, what it is trying to accomplish, and future roadmap. Here are the edited excerpts: What are the key problems that uEngage is trying to address? When Zomato, Swiggy, and other aggregators entered the picture, we couldn’t understand why they kept increasing commissions and pressuring merchants. Initially, it was 14%, which seemed high. Now, it’s beyond 22% for a major list of merchants, with some newer brands facing rates up to 32-35%. But that’s just the beginning. Beyond base commissions, there are additional costs like payment gateway charges, marketing click payments, often without clear, and cancellation charges without go ahead from the merchant. Recently, I met a leading Zomato-listed restaurant in Chandigarh. Despite generating sales worth Rs 30 lakh, they received only Rs 14.91 lakh, over 50% of their revenue. This has been happening for a while, and this is why we started uEngage. While aggregators offer great technology, demand generation, and modern logistics, there are downsides. Merchants lose control over brand positioning, customer relationship and face significant financial constraints. While aggregators aren’t necessarily evil, there’s much at stake for restaurants in the given circumstances. Please touch upon how the platform works, and how your growth has been so far? uEngage is Like Shopify for restaurants. Being a food-specific platform, we have been able to go deeper and offer extensive plug n play solutions to our restaurant partners. Initially launched as digital ordering platform for restaurants, uEngage has extended the platform into 3 different products covering: Direct Ordering (Mobile Apps, SEO First Websites, WhatsApp Ordering and KIOSk Ordering) – uEngage EDGE Customer Marketing and Omni Channel Loyalty – uEngage PRISM Last Mile Delivery and Tracking (Self Delivery and 3PL) – uEngage Flash At one end we have integrated industry leading POS and Billing Players like Petpooja , POSIST, Urban Piper, TM Bill, etc. to make life simpler for outlet staff, on the other end, we work closely with leading logistics players such as Dunzo, Zomato Xtreme (Zomato’s B2B service), Shadowfax, Loadshare, and Rapido. Together, they form a comprehensive Direct Ordering stack, including commerce, marketing, and logistics components. This ecosystem enables us to provide a holistic solution to our clients. As far as our financial growth goes, last year, our revenue stood at Rs 5.7 crore. This year, we anticipate closing it around Rs 13 crore to Rs 14 crore. This year, we’re projecting a GMV of around Rs 310 crore rupees for our brands. Orders from partner platforms to our revenue; they belong to the respective brands. However, they contribute to the GMV we generate for them. Our focus as a bootstrap company remains on profitability, and we’ve been profitable for more than two years now. Regarding our partnerships, we currently work with close to 4,000 outlets for our Direct Ordering Business and overall 15000+ Outlets for all our offerings including ONDC. What are your plans for the ONDC network? The ONDC is still at a nascent stage but a significant contributor to our revenue. Currently, we have around 15,000 outlets. Our target is to reach 50,000 outlets within the next three to four quarters.

Baron Capital values Swiggy at $14.7 Bn

EntrackrEntrackr · 10m ago
Baron Capital values Swiggy at $14.7 Bn
Medial

US Investor Baron Capital has valued food-tech company Swiggy at $14.74 billion as of June 2024, according to regulatory filings with the US’ Securities and Exchange Commission (SEC). This is nearly 2.6% down from its last $15.1 billion valuation estimates by Baron Capital in March. The valuation dip in June appears to be a result of rupee depreciation. This comes at a time when Swiggy is gearing up for its initial public offering (IPO). The Bengaluru-based firm received shareholders’ nod to float its $1.25 billion IPO and it reportedly filed papers with SEBI via a confidential route in May. The food tech company will raise up to Rs 3,750 crore ($450 million) via fresh issue of equity shares and an offer for sale of up to an aggregate amount of Rs 6,664 crore ($800 million) in its initial public offering. Swiggy recorded Rs 5,476 crore in revenue from operations and a Rs 1,600 crore loss during the first three quarters of the financial year FY24. Entrackr had exclusively reported financial numbers and a secondary pitch by the company in April. Ahead of the IPO, Swiggy also rolled out its fifth ESOP liquidity programme worth $65 million in July. It claims to have enabled over Rs 1,000 Cr of ESOPs liquidity over the five events which benefited 3,200 employees. Swiggy’s rival Zomato is currently valued at $28.3 billion, as per stock exchange data. The Deepinder Goyal-led firm posted Rs 4,206 crore in revenue with Rs 253 crore in profits in the first quarter of FY24. According to the UBS report, Zomato’s order growth increased by 1.6% MoM in July while Swiggy’s order growth decreased by 4.6%. On a year-on-year basis, Zomato registered 29% growth as compared to 11% growth by Swiggy.

Baron Capital marks up Swiggy’s valuation to $15.1 Bn

EntrackrEntrackr · 1y ago
Baron Capital marks up Swiggy’s valuation to $15.1 Bn
Medial

US-based asset manager Baron Capital has marked up the valuation of Swiggy to $15.1 billion, according to regulatory filings with the US’ Securities and Exchange Commission (SEC). This is a nearly 25% jump in the company’s valuation from $12.1 billion estimated by Baron as of December 2023. Soon after Baron’s mark up, Swiggy’s early backer Invesco also increased its valuation to $12.7 billion in April. The development was first reported by ET. This comes at a time when Swiggy is gearing up for its initial public offering (IPO). The Bengaluru-based firm received shareholders’ nod to float its $1.25 billion IPO and it reportedly filed papers with SEBI via confidential route in May. Before filing IPO papers, Swiggy was pitching a pre-IPO deal to high net-worth individuals (HNIs) to buy its shares at a 20% discount. Entrackr exclusively reported the development. Swiggy recorded Rs 5,476 crore in revenue from operations and Rs 1,600 crore loss during the first three quarters of the financial year FY24. Entrackr had exclusively reported financial numbers and secondary pitch by the company in April. In FY23, its revenue stood at Rs 8,265 crore in FY23 whereas its losses soared to Rs 4,179 crore. Besides Swiggy, Pine Labs, Meesho, FirstCry and Ola Electric also saw markups in their valuation in the last six months. Swiggy’s arch rival Zomato is currently valued at $18.7 billion, as per stock exchange data. The latter recently hit a market cap of $21 billion. Meanwhile, Baron has marked down edtech company Byju’s valuation to only $24 million as of March 2024. Earlier, BlackRock had already slashed the company’s valuation to $1 billion from $22 billion in early 2022.

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