Deepinder Goyal, the founder and CEO of Zomato, has officially entered the billionaire club. This milestone follows a continued rally in the food delivery company’s shares, which saw a notable increase on Monday.
Goyal’s 4.19% stake in Zomato, amounting to 369.5 million shares, has now reached a valuation of approximately Rs 8,465 crore (around $1.1 billion). The company’s stock closed at Rs 229 per share, marking a 2.99% rise from the previous close. During the day, Zomato’s stock achieved a 52-week high of Rs 232 on the Bombay Stock Exchange (BSE).
At the end of the trading day, Zomato’s market capitalisation stood at Rs 2.02 trillion. This surge in stock price followed the company’s decision to hike its platform fee to Rs 6.
Deepinder Goyal, a 41-year-old IIT Delhi graduate, co-founded FoodieBay.com (later renamed Zomato) while working at Bain and Company. After securing initial funding from Info Edge in 2011, Goyal and his team left their jobs to focus solely on growing Zomato. The company quickly ascended to unicorn status by 2018.
Zomato’s recent impressive performance can be largely attributed to its quick commerce business, Blinkit, which has outpaced competitors like Swiggy Instamart and Zepto. Acquired by Zomato in 2022 for $568 million, Blinkit is now considered the most valuable asset in Zomato’s portfolio.
Analysts expect Blinkit to surpass Zomato’s core food delivery business in gross order value (GOV) sooner than anticipated. A recent note from Goldman Sachs values Blinkit at $13 billion, a significant increase from $2 billion in March 2023, surpassing Zomato’s core food delivery business. The note predicts Blinkit’s GOV will grow at a 53% CAGR from FY24-27, with both GOV and Ebitda surpassing food delivery by FY29.
While Zomato prioritizes growth investments over immediate profitability, analysts expect Blinkit’s path to sustainable adjusted Ebitda margins (4-5% of GOV) may take longer than its food delivery counterpart. However, factors such as advertising income, take-rates, and operational efficiencies are expected to drive gradual profitability improvements.
Zomato’s food delivery Ebitda margin is among the highest globally, and similar results are anticipated for Blinkit.