Restaurant-finder and food-delivery startup Zomato has been valued at $2.5 billion, a report in a national daily stated citing investment bank Morgan Stanley. Unicorn is an industry term for startups commanding a valuation of $1 billion or more.
According to a report in The Times of India, this estimate is three times more than Zomato’s valuation in its last funding round. This will put the Gurgaon-based company much ahead of other unicorns like e-commerce firm Snapdeal, ad-tech firm InMobi, e-tailer Shopclues, online classified site Quikr and messaging app Hike.
The food-tech sector has been heating up of late with Ola acquiring Foodpanda India in December 2017 after rival Uber's entry into food delivery business. There were also reports in November last year of a merger between Zomato and Swiggy.
The international brokerage firm valued Zomato while taking stock of the startup's publicly traded shareholder Info Edge (India) Ltd, which runs jobs portal Naukri.com, realty site 99acres and online matrimonial platform Jeevansathi, the TOI report added.
Media reports in September last year said that Zomato may raise $200 million from Chinese e-tailing giant Alibaba. It is not clear whether the investment bank's new valuation of Zomato will affect the negotiations.
Zomato had narrowed its losses to Rs 389 crore for 2016-17 from Rs 590.1 crore the year before, according to the annual report of its largest shareholder Info Edge (India) Ltd. The company had posted revenues of Rs 332.3 crore, up 81% from Rs 183.9 crore in 2015-16. Revenues from Zomato’s food-ordering business, which contributes 20% to the company’s top line, jumped eight-fold from the previous year to around $9 million in 2016-17.
Zomato also pursued the inorganic route when it acquired on-demand logistics and food delivery startup Runnr in September 2017, a buyout that is expected to make it a full-stack player in the space. Likewise, in the same month last year, it also invested in home-cooked meal delivery startup TinMen.
For the second quarter of financial year 2017-18, Info Edge’s operational revenues rose 7% to Rs 225.2 crore from Rs 209.9 crore in the year-ago period, the firm’s stock-exchange filings revealed. The company’s net profit declined to Rs 78.6 crore in the quarter ended 30 September from Rs 80 crore in the same period last year, as a result of some tax reversal gains in the previous year.
