Zomato IPO: Indian food delivery startup is raising $1.3 billion in major public offering in Mumbai

Food delivery startup Zomato is looking to raise some $1.3 billion this week in an initial public offering in Mumbai, the company said in a recent regulatory filing. It expects to close its books on Friday, and is the biggest offering in the country so far in 2021, according to Dealogic.

The company plans to sell shares priced between 72 and 76 rupees (97 cents to $1.02) per share. At the upper end of the range, Zomato would be valued at almost $8 billion.

Its founder Deepinder Goyal began Wednesday with a nervous tweet: “Just ordered a triple breakfast @zomato. Stress eating.”

Investors are closely watching the offering, which will give some insight into the market’s appetite for Indian startups. The country has a ton of tech unicorns — companies that have reached a valuation of at least $1 billion — but none of them have ever gone public before.

Analysts have expressed concern that Indian startups — many of which have raised hundreds of millions of dollars from private markets at extremely high valuations — need to start showing consistent profits and healthy exits for investors.

“This IPO is in some sense the beginning of the Indian digital ecosystem’s promises starting to get fulfilled,” Ashish Fafadia, partner at the Indian venture capital firm Blume Ventures, told CNN Business.

He said investors will be looking at how the company performs after it lists, along with how well Zomato is able to hit quarterly targets.

“The ultimate long-term test would be if they are able to become a profitable business,” he added.

Paving the way

Zomato was founded in New Delhi in 2008 by Goyal. The company has built a name for itself as one of India’s most successful startups, with a team of more than 5,000 employees and a reach across more than 10,000 cities in two dozen countries, from Sri Lanka and Slovakia to South Africa.

The firm made waves in January 2020 when it bought Uber Eats in India, handing Zomato a big win in its home market. California-based Uber (UBER) picked up a nearly 10% stake in Zomato as part of the deal.

Zomato’s public offering this month could also pave the way for more Indian unicorns to go public down the road.

Walmart-owned Flipkart, which is the only Indian tech unicorn to have been acquired at a valuation of more than $1 billion, is considering a public offering, according to media reports.
That e-commerce firm raised $3.6 billion in its latest round of funding from investors including GIC, the Canada Pension Plan Investment Board, SoftBank’s Vision Fund 2 and Walmart (WMT), the company said this week. Flipkart is now valued at nearly $38 billion.

Zomato’s IPO will also serve as another test for the closely watched global food delivery industry. Deliveroo’s IPO crashed in London earlier this year despite great fanfare, becoming the city’s worst debut on record.

— Michelle Toh contributed to this report.

2021 Trends That May Influence Food Marketing

2021 Trends That May Influence Food Marketing

By Jared Scott, CMO, quench

2021 Trends That May Influence Food MarketingCOVID-19 brought disruption to nearly every industry in 2020. Food marketers, take note of the following trends that may impact the food and beverage industry this year and beyond.

Establishing equity

Greater representation is lacking in the food and beverage industry, and Gen Z and Millennials are demanding change.

The food and beverage industry previously took a long, hard look at its ingrained attitude of exclusivity and tolerance when the #MeToo movement emerged, and the #BlackLivesMatter movement pushed back against brands exhibiting empty social media sentiment and actions.

Brands that are listening include Costco, which has committed millions toward the Black Economic Development Fund in an effort to close the racial wealth gap by encouraging corporations to make investments designed to improve economic opportunity for Black Americans.

Wellness is no longer an exclusive, top-shelf luxury reserved for those who can afford it. Inclusive nutrition is here. New brands and platforms, like Happy Family Organics and Target’s Good & Gather, are eliminating prohibitive cost barriers and developing luxury offerings for the mass market.

Despite these positive steps, experts believe an estimated one-third of small, independent farmers could go bankrupt this year, and one in every four U.S. restaurants will go out of business.

To alleviate the burden, brands and incubators like Mercato Partners’ investment fund, Savory, are offering funding for fragile businesses. Savory provides restaurateurs with numerous offerings such as financial support or supply chain technologies.

Climate diets 

Almost two-thirds (64 percent) of all consumers want to reduce their carbon footprint. Companies have taken note, and are exploring ways to improve carbon-neutral practices, reimagining urban spaces for farming purposes, and using new technology to replicate or accelerate essential processes found in nature.

For example, Quorn Foods added carbon labeling to its food products. This effort positions carbon emissions as a health consideration, listing carbon footprint calculations alongside nutritional information.

A whopping two-thirds of the global population will live in cities by 2050 and sustainable farming is already occurring in urban dwellings. Just look up. Brooklyn Grange runs three rooftop soil farms in New York City, growing more than 36 metric tons of organic produce a year.

U.S. beekeepers lost 50 billion bees in 2019. To curb further population loss, the GIANT retail grocery company added a seven-acre, pollinator-friendly solar field to its corporate headquarters in Pennsylvania.

Digitizing supply 

Automation technology represents a central component in the explosion of e-commerce, leading supermarkets to explore alternative fulfillment options. Micro-fulfillment offers grocers the ability to pick orders 10 times faster and more efficiently than human workers, while maintaining stores’ ability to serve local customers. 

Companies such as Takeoff Technologies help retailers like Albertsons Companies, Wakefern Food Corporation and Ahold Delhaize with developing micro-fulfillment solutions and centers.

Protein-packed phytonutrients

Phytonutrients are becoming an established part of consumers’ diets due to their health and wellness properties that assist with the prevention of chronic diseases.

The classification of specific phytonutrients using artificial intelligence will allow companies to facilitate the production of these products to support the explosion of consumer interest.

Algae is on the rise as a food ingredient, but the taste can use some help.  Algenuity’s Chlorella Colours remove the microalgae’s unpalatable taste without reducing the nutritional content. The company’s partnership with Unilever Foods allows the company access to Unilever’s research and development facilities and will help Unilever in its commitment to accessible, plant-based products.

Forager Project identifies and classifies specific phytonutrients available from plants using its machine-learning algorithm. The company raised $27 million in its last round of seed funding for its first product, and currently has a partnership in place with Danone North America.

What do you see as the next big food trend?

Food entrepreneurship webinar series begins in February | Farm Forum

North Dakota State University Extension is hosting a food entrepreneurship webinar series in February.

The webinars will be held virtually from 5 to 6 p.m. Central time Feb. 2, Feb. 9, Feb. 16 and Feb. 23.

The topics and presenters are:

Feb. 2:

  • “Learn about disposal options for butcher waste and the process of composting butcher waste” — Mary Keena, Extension livestock environmental management specialist based at NDSU’s Carrington Research Extension Center.

Feb 9:

  • “Diversify your crops: high-tunnel cut flower production” — Esther McGinnis, NDSU Extension horticulturist; and “What to expect with farm-to-school and farmers markets” — Jan Stankiewicz, NDSU Extension community health and nutrition specialist.

Feb. 16:

  • “Connecting producers to consumers with local meat” — Travis Hoffman, NDSU Extension sheep specialist; and “Creating your own food product” — Julie Garden-Robinson, NDSU Extension food and nutrition specialist.

Feb. 23:

  • “High-value crops research update” — Harlene Hatterman-Valenti, high-value crop production professor, NDSU plant sciences department; and “Notes on fruit production” — Kathy Wiederholt, fruit project manager, Carrington Research Extension Center.