Zomato rocking global market, CEO refutes HSBC valuation report

Replying back to the HSBC report that halved Zomato's valuation, Deepinder Goyal, Founder & CEO of Zomato has written a mail to its 2100 employees globally saying that they are market leaders in about 18 countries today.

Citing that the investors are bullish about their company and willing to invest in the company further, Goyal also shared that there company is growing at (>50%) of business to some of the biggest restaurant names in the country.

“The report claims that we have low market share. Our internal data shows that we drove a large percentage (>50%) of business to some of the biggest restaurant names in the country. Our traffic in India, our home market, also grew 8% in April 2016 over March 2016. We have over 8.5 million monthly unique in India alone – very few Indian companies can claim that much traffic share in a single category. Also, we are currently present in 23 countries, and we are the market leaders in 18 of them,” Goyal added.

According to the HSBC report it also mentioned that the company needs to invest in their online and delivery business, but Goyal disagreed to the report claiming that the restaurant search engine site has hit 33,000 online orders yesterday – at their average order values.

“We already are profitable in the order business at a unit economics level, and the overall online ordering business will hit profitability when we get to an average of 40,000 orders a day. We should get there in the next 3-6 months. Also, there isn’t any food delivery company in the world which owns its last mile logistics fleet, operates at scale, and is profitable. These assumptions and statements in the HSBC report make it look like they’re coming from someone who doesn’t – and hasn’t bothered to – understand the space well,” Goyal added further.

Citing about the US operations it said the US is an overcrowded market, and we will not be able to make inroads into the US. HSBC, because it never spoke to us, doesn’t know that we didn’t acquire Urbanspoon for its US presence.

“We acquired it for Australia and Canada, and our traffic is kicking ass in these two markets. We are monetising the traffic in Australia already, and Melbourne and Sydney are already in the top 5 revenue generating cities for us across the world,” Goyal clarified.

Going forward Goyal also claimed that revenue has doubled over the past 9 months. Costs have been rationalised. “Burn is down 70% from the peak – it was high because we were experimenting with various business models and geographies, which we have cut down drastically – and we are now focused on the large opportunity in front of us in our core business and core markets,” Goyal elaborated.