How ₹10 lakh became ₹300 crore for a Zomato angel investor

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The story of Zomato's rise from a startup to a public company shows how the Indian startup ecosystem has changed over time. There has been a lot of excitement about Zomato's decision to go public, which shows that new Indian startups are increasingly entering the public markets. The anticipation has not just been among the founders and venture capitalists but has also gripped retail investors in India, who have been eager to participate in the startup revolution through initial public offerings (IPO).

How Deepika Has Made Rs.300 Crore From Rs.10 Lakh Investment in Zomato

In July 2010, Deepika decided to put money into Zomato, a restaurant listing service that was just starting to grow. She was drawn to the idea because of her personal interest in food and because the founders had strong backgrounds that made her believe they could succeed in a tough market. Even though investing in startups comes with risks, Deepika was ready for the possibility that she could lose her 10 lakh rupees. Zomato, recognizing her commitment, issued her equity, formally adding her to their investor roster. Putting money into Zomato when it was just starting out has paid off big time over the years.

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Series A Investment

• Investor: Info Edge

• Funding Round: Series A

• Amount: Rs 13.6 Crore

• Date: February 2012

• Impact: Stock value increase

• Investor's Equity Value: Rs 50 Lakh (5x increase in less than 2 years)

Series B Investment

• Investor: Info Edge

• Outcome: Deepika's holdings in Zomato climbed to a value of Rs 1.11 crore.

• Growth: A remarkable tenfold increase observed in approximately two years.

 Series D Funding Injection

• November 2013: Zomato secures Rs.212 crore.

• Lead Investor: Sequoia Fund.

• Increases Deepika's net worth to Rs.4.4 crore.

• Her investment grows 44-fold in three years.

• Sequoia's involvement marks a significant development, given their stature.

 Series F Investment

In April 2015, Zomato secured substantial funding, with the investing firm Info Edge contributing INR 155 crore. With this capital injection, the Series F fundraiser got off the ground and raised a total of INR 311 crore.

Zomato Market Valuation reached INR 5,000 crore. Deepika's net worth surged to INR 18.4 crore, a 184-fold increase from the initial investment.

Following this event, Zomato hosted another major funding event in 2015, gathering INR 388 crore with Dunearn Investments leading the charge.

Food Delivery Venture

After finding that restaurant discovery wasn't bringing in enough money, Zomato changed its business model to include food delivery services. The food delivery aspect significantly expanded following the acquisition of Runnr, a company previously backed by Blume. Now widely recognized by its customers as a food delivery service, Zomato has transitioned from its original role in the restaurant industry.

Escalation in Capital Generation in 2018

• Zomato's funding rounds in 2018: 3

• Total raised: ₹2,638 crore

• Significant contributor: Ant Financial (₹2,500 crore)

Deepika's stake value in Zomato soared to ₹53 crore, a 530-fold increase from the initial investment, reflecting a significant uptick within eight years.

Expanded Investment and Business Growth

• 2020: In a strategic move, Zomato merged with Uber Eats' operations in India.

• Investment Details: Uber invested ₹1,376 crore in Zomato following the acquisition.

• Significant Funding: August 2020 saw a substantial investment of ₹4,580 crore, with Tiger Global leading the charge.

• Stakeholder Impact: By Series J, Deepika's holdings were valued at ₹72.54 crore.

Gearing Up for Public Offering in 2021

In February 2021, Zomato secured significant funding, boosting Deepika's net worth to INR 94 crore, a staggering increase from her initial investment. The private market valuation of Zomato shares hit INR 58 each. Following regulatory revisions by SEBI in March, Zomato's vision for an IPO started to materialize, marking a new chapter in its financial journey.

Zomato's Market Debut

• Draft Prospectus Filed: Zomato initiated its journey to go public.

• Price Range Set: Shares priced between Rs.72 - Rs.76.

• IPO Launch: Commenced on July 14 and was covered 38 times.

• Investor Fortunes: At Rs.76 per share, Deepika's stake soared to Rs.150 crore.

Post IPO on Dalal Street

Zomato made its debut on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on July 23. The initial trading price was Rs.116, which reflected a 53% leap from the original offer price of Rs.76. This marked a considerable milestone for early backers.

Zomato's Share Performance:

• Initial listing price: Rs.116

• Current share price: Rs.186

So in just over a decade, Deepika's early Rs.10 lakh bet on Zomato multiplied over 3,000 times to Rs.300 crore, showing the power of being an early investor in a successful startup. While most startups fail, the few big winners can generate enormous returns for their early backers.

India's Startup Landscape: Key Investment Moves in the Last Week

1. Andreessen Horowitz's (a16z) Investment Plans: The renowned Silicon Valley-based venture capital firm, Andreessen Horowitz, is planning a $500 million investment in Indian startups. This move could significantly impact the Indian startup landscape, especially in sectors like cross-border payments and opinion sharing platforms​ (TechCrunch)​.

2. GetVantage Fund for Women Entrepreneurs: GetVantage, a revenue-based financing startup, has launched a Rs 100 crore fund specifically aimed at supporting women entrepreneurs. This initiative is expected to back over 400 businesses by 2025, providing non-dilutive capital in partnership with diversity-focused networks like Encubay​ (Outlook India)​.

3. Growth of Women-led Startups: The Indian startup ecosystem has witnessed a considerable rise in women-led startups over the past decade. Funding for these startups reached $1.1 billion in 2023, a significant increase from $0.456 billion in 2014. The country now has twenty unicorns founded by women, indicating the growing influence of women in the entrepreneurial space (mint).

4. Funding Trends in 2023: The Indian tech startup ecosystem experienced a significant decrease in funding, with only 17 investments exceeding $100 million in value, compared to 55 last year. Fintech, retail, and enterprise applications were the top-funded sectors, although they also saw substantial drops in investment. Companies like Lenskart, PhonePe, and Perfios were among the top-funded in 2023 (Forbes India).

5. Predictions for Future Unicorns: Despite the current funding winter, there's optimism about the future, with projections suggesting 147 Indian companies could become unicorns in the next five years. Sectors such as Software as a Service (SaaS), direct to consumer (D2C), and fintech are attracting the most investment, highlighting the dynamic nature of India's startup ecosystem (Forbes India).

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