Zomato founder Deepinder Goyal joins billionaire club

Mangalore Today News Network

New Delhi, July 15, 2024: Deepinder Goyal, the founder and CEO of Zomato, has become a billionaire following a record rally in Zomato’s shares over the past year.

Shares of the online food delivery platform surged 4% today, hitting a fresh lifetime high of Rs 232 on the Bombay Stock Exchange (BSE).

It may be noted that the stock has increased by over 300% since its low in July 2023.

The surge has pushed Zomato’s market cap past Rs 1.9 lakh crore and Goyal’s net worth beyond Rs 8,000 crore, making him India’s richest professional manager at 41 years old.

Goyal owns 36.95 crore shares, equivalent to a 4.24% stake in the company.

The rise in Zomato’s stock price is attributed to the strong performance of its quick commerce business, Blinkit.

Blinkit has been outperforming competitors like Swiggy Instamart and Zepto and is expected to turn profitable earlier than anticipated.

Zomato has indicated that Blinkit could achieve EBITDA break-even by the first quarter of fiscal 2025.

The profitability of Zomato’s food delivery business has also boosted investor confidence.

Analysts expect Zomato to increase investments in Blinkit after it reaches break-even, which could lead Blinkit’s gross order value (GOV) to surpass that of the food delivery business sooner than expected.

This strategy aims to strengthen Zomato’s market position despite growing competition.

While it may take longer for Blinkit to achieve sustainable EBITDA margins, factors such as advertising income, take-rates, and operational efficiencies are expected to enhance profitability over time.

A recent Goldman Sachs note highlights that Blinkit now has a higher implied value than Zomato’s core food delivery business. Blinkit is valued at $13 billion, up from $2 billion in March 2023, with a per-share value of Rs 119, compared to Rs 98 for food delivery.

Goldman Sachs predicts Blinkit’s GOV will grow at a 53% compound annual growth rate (CAGR) from FY2024-27, with its GOV and EBITDA surpassing food delivery by FY29.

Acquired by Zomato in 2022 for $568 million, Blinkit has significantly improved its financial health, making it the most valuable segment in Zomato’s portfolio.

Deepinder Goyal, an IIT Delhi graduate in Mathematics and Computing, co-founded Zomato, originally named FoodieBay.com, while working at Bain & Company.

His passion for food led him to focus on the company full-time with initial funding from Info Edge in 2011.

Zomato quickly became a prominent player in India’s food tech industry, achieving unicorn status in 2018.