'One step for Zomato, a giant leap for Indian startups': How founders of other startups are reacting to the IPO

Zomato's Deepinder Goyal

From Paytm’s founder Vijay Shekhar Sharma to Info Edge’s co-founder Hitesh Oberoi, everyone is rooting for one of the country's first initial public offerings (IPOs) by an internet company -- Zomato -- and its co-founder Deepinder Goyal.

On July 13, the online food delivery firm raised Rs 4,196.51 crore from 186 anchor investors, ahead of its IPO opening.

Now, the Rs 9,375-crore IPO has opened for subscription, and, according to experts, as it is the first startup in the Indian food aggregator space to be listed on the bourses, the enthusiasm among investors is tremendous.

On Twitter, Sharma could be seen wishing Goyal luck. "Make it large Deepi ! Best wishes for superb listing. Rooting for you man #ZomatoIPO," he tweeted.

Make it large Deepi !

Best wishes for superb listing. Rooting for you man #ZomatoIPO https://t.co/ip11uQe6Ic

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— Vijay Shekhar Sharma (@vijayshekhar) July 14, 2021

Acknowledging Goyal and Pankaj Chaddah’s hard work through the years, Hitesh Oberoi whose firm is also an early investor of Zomato said: “Deepinder - It's been amazing to see your crazy journey from the sidelines. Still remember the early discussions with you and @pankajchaddah. As you take the big leap, wishing you and team zomato all the best. And thank you for creating value for InfoEdge along the way @deepigoyal."

Congrats @deepigoyal & the entire @zomato team! The IPO is a huge validation of the value created through the years, and is a landmark event for the start-up ecosystem.

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Feeling extremely lucky to have been a part of the journey. Keep showing the way! #ZomatoIPO

— Pankaj Chaddah (@pankajchaddah) July 14, 2021

How it started. How it’s going @zomato @deepigoyal pic.twitter.com/zcNou498UN

— Sanjeev Bikhchandani (@sbikh) July 14, 2021

Amitabh Kant, the chief executive officer of the NITI Ayog, also congratulated Goyal for the IPO.

"Congrats @zomato for the highly successful 9375 Cr IPO & raising 4000 Cr from anchor investors ahead of IPO. Zomato has totally redefined the food service & delivery industry. Now present in 10,000 cities in 24 countries, their journey is truly inspirational & mind boggling. Gr8!, (sic)" Kant tweeted.

Zomato, which was founded by Goyal and Chaddah, saw the latter’s exit in 2018 almost a decade after founding the company. Chaddah currently runs mental wellness startup Mindhouse.

Goyal, who remained missing from analyst and media interactions ahead of the IPO, was seen active on Twitter on July 14.

Read: Zomato IPO subscribed 17% on day 1 so far, retail portion booked 94%

Meanwhile, Zerodha co-founder Nikhil Kamath said in a statement that the market is always ready to accept and accommodate good business and a lot depends on how the company sustains its growth and profits, going forward.

“I am looking forward to the IPO as it is the first-of-a-kind in the Indian markets, in the food delivery and restaurant aggregator space. The average order value of food delivery is consistently growing at 10 percent for the last two years for the company with good market share,” he said.

“However, Zomato’s valuation at 25x FY21 EV/sales versus 10x for global peers and 12x for Indian QSRs looks on the expensive side. But the listed peer groups of the world also trade at hefty valuations even though no profits are generated. They can sustain those market valuations based on user experience, market position and tech platforms," he added.

Read | Zomato IPO opens for subscription today: Should you place an order?

Harshil Mathur, co-founder of Razorpay and Tarun Davda, partner and managing director of venture capital firm Matrix Partners, said the Zomato IPO was a huge moment for India's startups ecosystem.

"All the best @deepigoyal @pradyotghate and the entire @zomato
team! It’s a huge moment for the entire Indian startup ecosystem. Truly inspirational," Mathur tweeted.

"Cheers to a fantastic listing Deepi and team Zomato this is an important milestone for the entire ecosystem and all of us are rooting for your success," said Davda on the micro-blogging site.

Kunal Bahl, co-founder of Snapdeal wrote on Twitter that with this IPO the line between customers and investors will get blurred.

Ankur Jain, founder of craft beer brand Bira, said more growth lies ahead for Zomato.

Congrats @deepigoyal ! What a milestone! Love what you have achieved in the last decade and now @Zomato has scaled! Many more decades of growth and impact ahead- more power to you!

— Ankur Jain (@TheBeerAnkur) July 14, 2021

Ashish Dave, CEO at Mirae Asset Venture Investments, India said that consumers will now be able to own a piece of brand that they consume. "Today we will see a startup become an Institution that will outlive the Founders. Consumers will now be able to own a piece of a brand that they consume. This is how you create Legacy. @deepigoyal & @zomato team has created a nice playbook for future entrepreneurs. Nicely done !" Dave tweeted.

Zomato’s IPO will pave the way for other Indian startups to go for IPOs. The next in the line is Paytm, which is expected to come up with its draft red herring prospectus (DRHP), shortly. Another fintech firm Mobikwik, on July 14, issued its DRHP.