Zomato CEO says HSBC’s halved valuation report is half-baked, cites figures and data to support his claim

As reported earlier, HSBC’s brokerage arm has halved Zomato’s valuation, which now stands at $500 million, citing lack of profitable markets.

Zomato’s CEO Deepinder Goyal has responded to this in a blog post titled Unicorn or Not?, hinting at the former valuation which had made it a Unicorn, a term for companies with $1 billion valuation. He has called the HSBC report an analyst report, which differs from other analysts’ opinions. He also says that the report comes across as being written by someone who doesn’t understand the space of food delivery.

"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," it says.

He added that in India, Zomato holds a large share of its operational market, citing that it drove over 50% of business to some of the biggest Indian restaurants, with an 8% growth and 33,000 online orders. He added that Zomato will become profitable when the number crosses an average of 40,000 orders a day.

Goyal's letter also talls about its international business, in markets like the Philippines, Australia and Canada, while not forgetting about the company's burn rate, which has come down 70% percent from its peak. He has clearly stated that “Fifteen out of the eighteen countries where we are traffic leaders are yet to see serious monetisation efforts,” while also hinting at the huge scope for improvement in the field.

He ended the note by asking his team to get back to work, and focus on execution.

You can read more from his blog here.

Image source