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Sanjeev Bikhchandani on why unicorns don’t go public in India

Swiggy and Zomato are neck and neck on delivery and Zomato also has a big non-delivery business.

ET Now|
Updated: Sep 11, 2019, 07.40 PM IST
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NRAI issues almost fixed, restaurants coming back: Sanjeev Bhikchandani, Zomato
NRAI issues almost fixed, restaurants coming back: Sanjeev Bhikchandani, Zomato
Zomato is currently focussing on cutting burden and getting into near breakeven which I think looks possible in the next few months, says Sanjeev Bikhchandani, Founder, Info Edge and investor in Zomato. Excerpts from an interview with ETNOW.

What is the situation between Zomato and the National Restaurant Association of India? There has been talk that Zomato has been laying off delivery stuff as a number of restaurants have gone off Zomato?
Zomato and NRAI are talking constantly. Their problem is being resolved as we speak. A lot of it has been resolved. A number of restaurants have came back on to the platform and I think that the problem is either behind us or hopefully will be behind us soon. Restaurants need Zomato, Zomato needs restaurants and both of them need customers and therefore it will get fixed. It is a matter of a week or two.

As far as Zomato letting go of some employees are concerned, these are difficult decisions. It is never easy. It helps nobody to have employees when there is not enough work. The key is when you let go of somebody, you do it to human face, you give enough notice, you give enough pay and you help them find jobs so that there is a soft landing. If you are able to do that, it is fine and that is what Zomato is working on.

At the same time, I would like to remind you that Zomato is hiring in a number of other areas. The number of delivery partners for Zomato has gone up from 50,000 fifteen months ago to almost 2.5 lakh or maybe 2.3 lakh. That means 1,80,000 more people are earning livelihoods. As organisations grow, there are calibrations, there are adjustments and this is one of them.

You are saying that this is just recalibration in a department where Zomato is laying off because a lot of people have jumped the gun and say that maybe that is also happening because of the logout controversy?
That is not true.

Would you look to give more money to Zomato, increase you investment?
Zomato has many options to raise money from should it need money, but it is currently focussing on cutting burden and getting into near breakeven which I think looks possible in the next few months.

Do you think Swiggy is beating Zomato now?
I do not think so. Swiggy and Zomato are neck and neck on delivery and then Zomato has got this whole other non-delivery business which is almost as big. I do not think Zomato is losing out in any way. In fact, Zomato is winning.

It is like the start-up ecosystem is in a parallel universe. Look at what is happening in the equity markets. In July, there was $2 billion selloff and you had over a billion dollars come into this universe. Is this a different world altogether?
Eventually they will converge but it will take time. Usually private markets are behind public markets on activity and valuations by a few months or a year or so. So it will converge. You cannot really divorce start-ups and private valuations from pubic valuations.

But is it not a problem that you are not seeing a lot of the unicorns go in for the public markets?
Well as long as private capital is available and they have the option, they do not need to go public unless there is a specific reason. But increasingly, there will be investors who want an exit and some of those exits will have to come from the public market. Having said that, in India if you are not a profit-making company, it is harder to go public and in private markets, they are willing to give a lot more time for start-ups to get to profits. So, there is that dichotomy and that needs to be fixed.

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