Zomato: ETSA 2024 | Zomato’s top rankings needed spring cleaning after IPO highs: Co-founder and CEO Deepinder Goyal

During a fireside chat at the Economic Times Startup Awards (ETSA), Zomato co-founder and CEO Deepinder Goyal spoke to ET’s Samidha Sharma about the food and grocery delivery company’s journey from being listed at $7.6 billion to achieving a market capitalization of $29 billion, its diversification into new businesses and the many ups and downs it has faced over the last 15 years. Edited excerpts…

When was the last time you were in Bengaluru?

In 2017… seven years ago. You don’t have to come here (Bengaluru) to build a startup!In 2022, you told me you strive to make the average company great by working your hardest… What was that like and where are you on a scale of 1-10?

The IPO was successful, business was doing well, and people were making a lot of money for the first time in their lives. They were competent people. Competent people cannot recognize that they have become complacent… They no longer look for progress, they just start filling their time… They don’t want to tell themselves that I’m done. They really take a lot of time and basically delay all the work… That’s what we’ve come to. For some time, nothing happened inside the organization. I literally had to remove almost everyone who lost that motivation and then restart the organization.

Read also: ETSA 2024 | I had to clear out Zomato’s senior management who lost motivation after the IPO: Deepinder Goyal

Where are you now in terms of your organizational role at Zomato?

I am currently mainly an HR specialist… and the team is quite knowledgeable and very thoughtful. We are a highly trusted team and no one wants to do someone else’s job. That’s why we turn to each other when we need help or information.

What is your lowest level as a founder who has encountered so many difficult situations?

Bottoming lows don’t happen when you run out of money because you can fight, figure something out, or change your position. My worst lows happen when people I trust… don’t show up. I’m sure I do this to people sometimes too where they expect me to show up and I don’t show up and that would be the worst for them. These downfalls are more personal than business.

What was the insurmountable point for Zomato… you had many moments of crisis?

The only time… (we felt) that we were dead was when Swiggy raised $1 billion and we had $35 million in the bank. It was bad.

By 2016-17, it was clear that you didn’t want to be involved in delivery… Since then, Zomato has become a high-execution and operational-intensive company. What caused this change?

It was survival instinct. If we hadn’t done that, we wouldn’t be here. Conquering Runnr… and the last mile was something we had to do to survive. Even Blinkit was the result of survival instinct. The food delivery network…the last mile is quite large. But let’s say if there is a new fast trading company that has a large passenger base, it can easily enter the food industry. However, food delivery cannot easily enter the fast-trade industry because you have dark stores. Delivering food is 10% harder than Blinkit. But if we don’t do it now, in 10 years, it’s over. So it was all survival instinct.

High-speed trading is highly competitive, and there may be a kirana (mom and pop store) and regulatory challenge?

The development of fast trading was also a surprise. We have noticed that Blinkit is not really making inroads into kiranas, it is not even affecting companies like Dmart. We are more or less eating up Amazon and Flipkart shares and modern retail space in larger cities. We are also increasing our intake a bit. When it comes to regulation, we will do what the government asks us to do.

Read also: ETSA 2024 | Fast trading without affecting Kirana stores: Deepinder Goyal by Zomato

What are your plans for District (Zomato events and restaurant spin-off)?

Six months ago we were doing 3.5 businesses, food delivery, fast trading, HyperPure and eating out. Eating out was an orphan and was part of the main Zomato app. When the Paytm deal came along, a separate app made sense. Now we’ll put it together and we’ll be operating in four of these companies instead of 3.5. So that’s how we think about it. District will be a separate app with dining out, ticketing, concerts, events… maybe shopping, lodging, and anything else you do away from home.

You are constantly diversifying your offering… Are you aware that in the sectors (like ticketing, where BookMyShow is a big player) that you enter, incumbents are restless?

After all, we are very afraid of everyone else. BookMyShow is 20 times bigger. What should they be afraid of? They have contracts with people for decades. There is no way we can break them.

How much of this diversification should be added to market capitalization? In 2021, you told us in an interview that you want to acquire companies if they add at least $10 billion to Zomato’s market capitalization…

Back then it was a completely different state where we were thinking about buying, but now we have our hands full. From a public market perspective, we do not operate as if we were a publicly traded company. We do our job and the result speaks for itself. We don’t look at the stock price at all and we don’t even follow what we expect investors to say. Fortunately, the public market has responded well so far.

What is the message you need to convey to new-age Indian startups looking to go public?

In hindsight, our IPO timing was great, but our IPO timing was off. We started the IPO process when the market was at its lowest point. Therefore, first of all, companies should not think about the right moment for a stock exchange debut. They should think of an IPO as part of a long-term journey and do it whenever you are ready.

Do you think many companies are going public because the markets are hot?

Yes, but they may not be ready for public markets. When you’re private, you’re forgiven for a lot of things, and when you’re public, the only way to sleep well at night is to be completely transparent about everything that’s going on. The zero line indicates an attempt to manipulate the stock price. Don’t do any of these things. Be transparent.

Thanks to your appearances on Shark Tank, we’ve seen a lot more of you in public. What was that experience like?

The startup culture in India relies too much on valuations, showcases and so on. I just went there (Shark Tank) to create a different narrative… get real and change the way people view startups and how they should be built. I felt it was my moral obligation to go there once, and I did so over the course of a weekend.

Won’t you come back?

Unfortunately, I can’t come back because this time Swiggy sponsored Shark Tank and kicked me out… That’s what I heard – they said it’s sponsorship and Deepinder Goyal can’t be on the show.

Read also: Swiggy’s sponsorship deal with Shark Tank includes my removal from the show: Zomato’s Deepinder Goyal at ET Startup Awards

So what are your views on Swiggy’s upcoming IPO?

I really don’t know and we’re not even thinking about it, so we’ll see what happens. What’s the point of thinking about what might happen when you don’t actually know what will happen? Better sleep an extra hour.