Zomato is expected to raise $750 million to $1 billion through its proposed initial public offering (IPO). According to the Economic Times, this would not involve investor exits or the sale of shares.
Zomato CEO Deepinder Goyal told employees that the IPO will most likely be a 100% primary offering. This implies that the company will end up raising more capital, rather than shareholders offloading stock in the open market.
"No existing shareholder is willing to sell any shares in our IPO. People think that Zomato will be a $50 billion company in five years (I hope) and it will be unwise to sell shares right now,” Goyal said.
Zomato’s existing investors including Info Edge (India), Tiger Global, Sequoia Capital, Temasek Holdings, and others, will not make any returns immediately since the company’s investors are not planning to sell any shares in the IPO process, the report said.
This will help the company to take on Swiggy, which is also raising around $800 million in fresh funds. Zomato is likely to go public by June at a valuation of $6-8 billion.
Last month, Zomato had raised $250 million in a fresh round of funding from existing and new investors. In a regulatory filing, InfoEdge said that Zomato has closed a primary fundraise of $250 million from five different investors including Kora Management for $115 million; Fidelity Management & Research Company for $55 million; Tiger Global Management for $50 million; Bow Wave Capital Management for $20 million; and Dragoneer Investment Group for $10 million.
Post these transactions, the Gurugram-based company was valued at $5.4 billion.
Goyal had earlier stated that the company was likely to achieve its best-ever monthly sales in December 2020, when it had closed a $660 million fundraise.
Both Zomato and competitor Swiggy have been on the path of recovery as online food-ordering picked up after the coronavirus-induced lockdown.