Uber Technologies Inc, which is looking to raise more than $1 billion in cash after a year of crises, said on Monday it would sell a 7.8% stake in its Indian business restaurant search and delivery app Zomato Media Pvt Ltd in a block sale. The move would give Uber’s partner SoftBank Group Corp the option to increase its present 5% stake in Zomato, the company said without detailing the size of the transaction or deadline for completion.
Uber Technologies is planning to sell its stake in Zomato, an e-commerce and restaurant aggregator, for Rs 1,020.4 crore through a block deal. The sale of the stake would give Uber Technologies approximately 7.8% of the total shares in Zomato (equivalent to shares held by Warburg Pincus). Uber will sell all of its shares in Zomato to Warburg Pincus at a price of Rs 1,020.4 crore. This stake sale is subject to regulatory approvals and the approval of all shareholders in Zomato.
In addition to selling shares in Zomato, Uber is also seeking support for its sale of its minority stake in GrabTaxi, the Malaysian online taxi booking application, from shareholders in that company. Uber Technologies is the holding company for its three subsidiaries: Uber Technologies Inc (US), Uber B.V. (Netherlands) and GrabTaxi Holdings Pte. Ltd (Singapore).
Zomato is an e-commerce and restaurant information company that connects consumers to restaurants across the globe. The company also develops food ordering services and operates a large marketplace for restaurants. It completed the acquisition of the remaining stake from Sequoia and other shareholders at an estimated value of $200 million, valuing the company at $770 million. Soon after completing the acquisition, Uber announced that they will be investing $100 million into Zomato.
Uber’s initial investment in Zomato was over $60 million. That amount was invested by Uber co-founder and CEO Travis Kalanick, who also serves as the managing director of the firm and chairman of its India unit. The investment was valued at $200 million, making it one of the largest investments by a US-based tech startup in India.
Zomato’s move to become profitable
Zomato has been attempting to cut down its losses in the past year or so. From Rs 871 crore in FY17, its total losses have dropped to Rs 614 crore in FY18. Zomato continues to be profitable despite the losses. This has been possible due to investments in acquiring a food ordering app called Just Eat. Clearly, not all is well with Zomato as it faces a crucial challenge next year.
Zomato’s stock has increased by 80% since its last listing on the NSE. That being said, some may argue that Zomato is doing well and therefore, there is no need to invest into the company as its fundamentals continue to improve. With the acquisition of Just Eat, Zomato is expected to see better growth in its user base. With the addition of more users, users will start ordering food more often and this would obviously lead to better food delivery service. However, this remains speculative at this point as it remains to be seen if Zomato can actually execute on these plans.
Downgrades investment in Blinkit
A detailed analysis of the financial numbers and performance metrics of Blinkit shows that the company is performing poorly in terms of its revenue growth, net losses and other key metrics. It is not clear why Zomato invested into Blinkit at all as it seems to be a subpar investment by Zomato.
Many have argued that Uber should not have invested at all. One of the primary reasons for Uber’s investment into Zomato is to help with its expansion in India. Uber has been criticized as it is using its investors’ money to further its expansion in India, instead of investing the money into the company itself and improving it further.
Zomato to see a big block deal today as Uber may sell off 7.8% stake
TechCrunch reports that Uber is planning to sell a big block of shares in its Indian business – about 7.7% – representing around 29.8 million shares at a valuation of $274 million, or Rs 1,920 crore approximately. Zomato is currently valued at $1.4 billion and the sale would see it increase its market cap to $2 billion.
Zomato was listed on the National Stock Exchange of India in December 2015. Zomato filed for an IPO listing with the Securities and Exchange Board of India(SEBI) in June 2015 and planned to raise around $100 million in its initial public offering (IPO). The market cap of Zomato has since gone up to over $1 billion, thanks to a recent $100 million investment by US-based Uber.
Till now, Zomato has not gone on to receive a huge amount of funds from its investors but that is about to change. A block deal is likely to take place today and Zomato could possibly see its investors coming to it with a major amount of money at hand. This would help further fuel their plans towards making more investments in the future.
Zomato is one of the first Indian companies to be given access to capital from foreign investors. While the company started off as a local success, it has since gained recognition among international investors. It was also one of the most highly-anticipated IPOs in the country.
Zomato shares jump nearly 20% after June qtr earnings
Zomato shares jumped nearly 20% after the company announced its June quarter earnings. Zomato has seen a lot of progress in terms of its financials and that has helped it gain a lot of love in the stock market. From a low of Rs 229, the stock has shot up to Rs 280 in just two days after the company announced its financial numbers.
Since Zomato was first listed on the NSE, it has not seen too much success in terms of its financial performance. In fact, it has only been able to see its losses increasing every year. One of the primary reasons behind this is that Zomato has been trying to cut down costs while improving its offerings.
Zomato is still making losses but the company says that it will be profitable by next year. We already know that Zomato has been able to cut down its losses from Rs 871 crore in FY17 to Rs 614 crore in FY18. However, the company needs to continue its efforts if it wants to become profitable by next year.
Uber sells 7.8% stake in India’s Zomato for $392 million
In a big move that helps Zomato expand its global footprint, Uber Technologies Inc is selling most of its stake in the online restaurant guide to a US, based private equity funds. Uber owns around 7.8% stake in Zomato and is likely to sell this stake to the PE firm at $388-392 million, according to sources privy on the deal.
The deal values Zomato between $1.6-$1.7 billion, including the proportionate deal value of its remaining primary investor Info Edge, which owns 20% in the company. Zomato’s filing with Sebi also shows that it will use about $75 million to fund its food ordering platform Zomato Order and at least another $75 million towards other expenses mainly towards international expansion, sources said.
Zomato’s shares surged about 20% on Tuesday to close at Rs 55.55 on the NSE
Zomato’s shares surged by 20% over the last week and touched an intraday high of Rs 55.55 on Tuesday. The selling of Uber’s stake in the company is set to contribute to Zomato’s expansion in overseas markets like South Africa and the Middle East. Zomato also recently acquired a Brazilian food ordering startup called Delivery Hero as part of its plan to diversify its business which currently relies heavily on advertising, a person familiar with the development said.
Zomato has over 75 million users, making it one of India’s most popular online food ordering platforms. The company is known for the services of its coupons and discounts. Zomato raising funds from such large investors made it one of the most anticipated IPOs in India. Zomato, a popular restaurant search and discovery app is valued at around $1.7 billion after raising Rs 1,328 crore ($211 million) in its initial public offering (IPO). The company had set the price band of Rs 710-722 per share for its IPO.
Cutting losses: Zomato has reduced its losses from Rs 871 crore to Rs 614 crore, FY18
A financial analysis on the financials of Zomato reveals that the company has been able to cut its losses from Rs 871 crore in FY17 to Rs 614 crore in FY18. This is already a huge success for Zomato as it continues to improve its finances. A detailed analysis shows that the company’s revenue has been increasing but at a slow rate.
Zomato’s revenue increased by just 20% in FY17 and by nearly 3% in FY18. The company has not yet been able to break even and it continues to make losses each year. However, some analysts have predicted that Zomato could be able to cut its losses down to Rs 100 crore as soon as possible since it is on the right track at the moment.
Breakeven goal: Zomato is aiming to be profitable by FY2021
Zomato has already set a breakeven goal for itself by 2021. This is something that could help the company bring in a lot of revenue streams in the future. The company aims to be profitable by this time and it seems like Zomato has been able to budget for itself well enough for this period.
Since Zomato wants to become profitable in five years, it will have to come up with more ways of gaining revenue quickly. Zomato has been working hard towards cutting down costs and making more investments in order to further improve its financials. Zomato’s revenue comes from advertisements, third-party sales and food ordering
Businesses like Zomato are known for their reliance on advertisements. Zomato’s advertising is usually seen on the company’s platform, with both in-house and external studios creating content for it. The company’s advertising revenue has been increasing over the years but at a slow rate. In FY17, it brought in just $47 million as compared to $40 million in FY16.
Zomato share sale: Big block deal at company, seller name unrevealed
Zomato is eyeing a business injection of about Rs 265 crore, with the proceeds from its initial share. The company’s IPO has been highly anticipated because of its competitive position in the food ordering space and the strong domestic market. In fact, it was one of the most talked-about IPOs in India.
As this was not an exchange deal, it did not have to be listed on one exchange but could be listed on multiple exchanges. Zomato is the first listed company that has sold shares in such a manner. Zomato has announced plans to raise $200 million from the share sale, which is part of its plan to expand overseas. The size of this deal highlights the fact that Zomato will be able to get more capital for its operations in international markets than what it was used to in India. This also means that Zomato will probably be able to invest more money into its business.
Zomato has seen a lot of excitement in the stock market since the company’s IPO. Over the last year, Zomato’s share price has increased over 80% and that too in a very short period of time. Now after its share sale, Zomato is all set to set sail and make much more money for its investors.
Zomato’s shares in the market have been growing steadily in the last few months. Over the last year, it has grown by over 80%. However, one of the main reasons behind this growth has also been the huge number of investors who have been buying up Zomato shares. Over the last year, a total of 10,000 investors have bought up shares in what is known as a ‘block deal’.
Zomato has numerous investors both in India and overseas. Some of the investors in Zomato include Tiger Global, Rocket Internet, Info Edge, Steadview Capital and South Africa’s Investec Bank. However, the biggest investor in Zomato is its founder Deepinder Goyal who bought up 12% equity share in the company.
Deepinder Goyal: Zomato’s founder is a major stakeholder
Deepinder Goyal is the founder of Zomato and he has been involved in the company since its inception. He owns 12% stake in the company which is worth over Rs 4,000 crore. Deepinder had earlier admitted that he has made money while investing in different startups and then selling them off at a profit.
Zomato has launched a subscription service called ‘Zomato Prime’ for restaurants via its mobile app. The service is open to all restaurants in India and offers an unlimited number of meals per month.
Bofa securities is the sole book runner for the block deal
Zomato is expected to bring in a lot of money for its investors, who will be buying up shares in the company. BofA Securities, which is a well-known broker in India, is the sole book runner for the deal. This means that only BofA will be helping investors buy up shares in Zomato and the firm expects to bring in a lot of revenue as well.
The first ever IPO of a food-tech company in India has been extremely successful for Zomato. Zomato’s shares have amounted a huge success for its investors who have seen their investment soar after the IPO. Most analysts have predicted that Zomato will be able to raise more funds from the market and that too in the form of more IPOs.
Zomato has become a very popular app for the internet users in India and that too for its restaurant search feature. The company has over 75 million users which is incredible and that too in just a short span of time. Zomato will be bringing in more funds and investors through its IPO and that could lead to more growth as well.
Conclusion
Zomato is the largest online food ordering company in India. It has been able to build a user base of 75 million users and its restaurant search feature has also been a massive success. Zomato offers both in-house and third-party advertisements as well. Zomato is one of the most popular apps in India and has been able to increase its revenue and profits over the last few years.
The company aims to further improve its ways of making money as it continues to grow in the market. Zomato’s shares have already seen a lot of success after its IPO and that probably will continue as well. Once Zomato starts making more profitability, it will definitely be able to become popular all over again.
Zomato is one of the most popular internet services in India today. The company has already received a lot of praise for its quick growth and that too in the food-tech market. Zomato has seen huge success after its IPO and it continues to be one of the fastest growing companies in India.
Zomato has received a lot of praise from the market and that too in such a short period of time. The company has been able to have a massive user-base and its restaurant search feature has also been very popular. Zomato was one of the best performing stocks at the time of its IPO and that is something it will enjoy again after it raises further funds post-IPO.
Zomato has been able to win a lot of popularity in a very short period of time with its restaurant search feature and it continues to grow. Food-tech startups in India are doing well as investors are now seeing the potential that these companies have and Zomato is no exception.
