Good Morning Dear Reader,
"Never have a bad meal," its tagline said.
In continuation of what we post yesterday on the subject w/image
here you go today with some crunches on Zomatoooooooo
Well, with an almost $8 billion post-IPO valuation, Zomato will certainly never have a bad meal again. A unicorn startup going public is a matter of great excitement for India, but it's also the right unicorn that builds this kind of excitement. Zomato is a household name in India. In some instances, a verb even—"Zomato me a pizza, no?" Around for 14 years, it has grown from restaurant listing to public listing—a feat in itself.
But as Sheela notes in today's articles, all the talk around Zomato focuses on what its IPO means for Indian startups. Not what it means for the public markets. Or for the investors in public markets. Zomato could now attract investment from "a largely unknown $3-4 billion hedge fund in the US or Europe", investors who had so far not dipped into Indian startups. It could also attract—and probably would since everybody knows Zomato—millennial investors brought in by discount-brokerage firms such as Zerodha, Upstox, and Groww.
Zomato's IPO opens up many doors, windows, probably even breaks some walls. Not necessarily all for the better, but the relationship between startups and public markets in India changes for good hereon. Consider the long line of eager Indian startups just waiting to pounce on that IPO chance. Be it Delhivery, Nykaa, or even Flipkart, they've all had dramatically different products, different timelines, and different growth trajectories—but that IPO goal stays common. Furthermore, "For Zomato itself, this public listing might not be anywhere as significant as one might think. Contrary to what one might believe, this IPO is not really an exit opportunity for Zomato’s investors. In fact, many of them are doubling down and purchasing more shares in the listing."
So, it's really about the ripple effect of Zomato's IPO. Be it bringing the inflationary forces of the startup world to public markets or giving its large investors—like Alibaba—a better investment opportunity, there's not a bad meal for anyone here
