As a bunch of technology companies in the world’s third largest startup ecosystem prepare to list their shares on Indian and foreign bourses, they are going through increasing internal changes such as re-aligning their cap tables and raising pre-IPO rounds.
Online food-tech giant Zomato is charting out its future course of action that involves filling its war chest against arch-rival Swiggy and upcoming challenger Amazon Food. The Gurugram-headquartered firm is expecting to raise USD 750 million to USD 1 billion by selling primary shares during its initial public offering (IPO). That means none of its existing investors would take an exit.
Deepinder Goyal, Zomato’s co-founder and chief executive officer, earlier this week told employees that the IPO is likely to be a 100% primary offering, as investors expect the company’s value to go up by many folds in the long run, according to a report by local media Economic Times.
“No existing shareholder is willing to sell any shares in our IPO… People think that Zomato will be a USD 50 billion company in five years (I hope) and it will be unwise to sell shares right now,” Goyal said.
This way, the company will end up raising more capital, rather than shareholders offloading stock in the open market, Goyal said.
Zomato, which plans to go public in June, recently raised a pre-IPO funding round of USD 250 million from existing and new investors at a total valuation of USD 5.4 billion, a steep increase from USD 3.9 billion-valuation last December.
Meanwhile, online insurance aggregator PolicyBazaar has recently completed a secondary share sale worth USD 45 million at a valuation of USD 2.4 billion, another ET report said. The transaction gave exit to private equity firm True North and some angel and individual investors. Prior to this, PolicyBazaar had done a secondary share transaction in November 2020 worth USD 20 million. The 12-year-old digital insurance marketplace is reportedly eyeing a valuation of around USD 3.5 billion for its planned IPO.
Similarly, omnichannel beauty retailer Nykaa is in discussions to raise USD 50-150 million, at a USD 2 billion-valuation, ahead of its listing at the end of this year or early next year. The Mumbai-headquartered company is expecting a valuation of USD 3.5 billion during the IPO. Last March, Nykaa entered the unicorn club after raising a USD 1.2 billion round led by Steadview Capital, which valued the company at USD 1.2 billion. Now it is reportedly looking to re-align its cap-table.
Some of the other startups that are gearing up to go public include omnichannel eyewear retailer Lenskart, gaming firm Nazara Technologies, Saas giant Freshworks, e-commerce logistics firm Delhivery, and e-grocery platform Grofers.