Deepinder Goyal, founder and chief executive of online delivery firm Zomato, said that the only thing that is under our control is execution.
They have no control over whether the company’s valuation goes up or down. He said this on Monday, when the company’s stock fell sharply with the news of good funding of rival company Swiggy.
Huge fall in market cap:
Reassuring employees after the company’s market cap fell to $9.78 billion coupled with heavy selloff in Zomato stock, Goyal said, “I have been waiting for a bear market for a long time now. That is when funding dries up for everyone and companies with the most solid team and execution rise to top,” he said.
Swiggy won $ 700 million:
Interestingly, this happened the day food and grocery delivery platform Swiggy announced a $700 million raise with a valuation of $10.7 billion.
In the last funding round held in July 2021, Swiggy raised $1.25 billion from SoftBank Vision Fund 2, Prosus, Accel and Wellington with a valuation of $5.5 billion.
With this investment, Bengaluru-based Swiggy has become the fourth Decacorn in the country, that is, a privately-held company with a value of $10 billion or more.
Prior to this, fintech company Paytm, hotel aggregator Oyo and ed-tech company Byju’s Decacorn have become.
Valuation still higher than IPO:
In an email to his employees, Goyal also said that even at $10 billion, the company’s market cap is more than its IPO valuation of $8 billion.
A rise in global and domestic bond yields triggered a sell-off in Internet companies like Zomato as well as Paytm and Policybazaar.
There is no change in the fundamentals of the business:
He wrote in the letter, “The same is the case with the stock market and public companies that without any change in the fundamentals of the business, there can be a significant change in valuation due to macroeconomic factors like inflation, interest rates etc.”
“We had no control over the company’s valuation going from $8 billion to $17 billion at the peak of the IPO and then coming down,” he said.