Food startup Zomato faces heat, HSBC marks down valuation by half

| Monday, May 9, 2016 - 12:24
First Published |
Food startup Zomato no longer a unicorn: HSBC

Food startup Zomato no longer a unicorn: HSBC

 New Delhi: With high-profile private equity funds and other investors slashing their investment valuations in the big Indian startups, the latest to face the markdown is the online food start-up Zomato.
According to media reports, HSBC's brokerage arm has now cut the valuation of Zomato, a move that comes close on the heels of valuation downgrade in e-commerce player Flipkart, some time back.
HSBC has reportedly cited concerns surrounding Zomato’s advertisement-heavy business model, growing competition in the food ordering space and money-losing international operations for the lower valuation.
Zomato Media Pvt Ltd has now been valued at $500 million by HSBC Securities & Capital Markets (India) Pvt Ltd, about half the valuation at which the restaurant search firm raised its last round of funding in September.
However, Zomato's largest shareholders Info Edge (India) don't opine the same claiming the restaurant listings' company will become profitable in a short span of time.
InfoEdge holds nearly 50 percent in the Gurgaon-based Zomato and also runs web sites like, 99acres and Jeevansathi, among others. In the same report, HSBC also lowered the valuation of another InfoEdge investee company, PolicyBazaar, by 10% from the current $200 million.
Food technology start-ups in the country have suffered due to a slowdown in funding, with some either closing down or getting acquired after failing to raise capital.

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