ET Now: So the big day nears. Are you feeling the pressure?
Gaurav Gupta: I would say that there is no pressure. There is just excitement. We are looking forward to it.
Are you going to have to do on Dalal Street what Amazon did on Wall Street, i.e. train investors to change their lens?
I must say it is actually the beginning of a new era. I fundamentally believe in that. But having said that, I think the job is almost getting done. I think we will get done over a period of time.
There are enough examples of internet companies out there globally that people have seen — how they have actually grown very fast. You call it hypergrowth and build a lot different use case for customers. I think we will continue to do that.
There is enough and more knowledge out there for people to understand. That is what we have seen from the investors that have actually wanted to invest in Zomato and we continue to see that going forward.
Let us talk a little bit more about investors feedback…
The response has been great. We are very fortunate to have gotten that kind of a response. I think that also means a lot more of responsibility.
Would you like to tell us a little bit about the quality of investors?
You will learn it very soon. But we are very glad to see the quality of investors and the extent of interest that we have seen across the globe.
So, why should a retail investor invest in Zomato today?
I think retail investors should invest in Zomato like they would invest in any other stock. More than that, I believe that there are a lot of customers out there who love us, and that will also make a difference.
But customers loving your business and customers loving the stock price — are they the same thing?
No, I said both. I said they would invest in Zomato like any other stock they would invest in. I think they are very smart investors. They would actually look for whether or not it makes sense for them. I think they will see something in that story what we are building.
The other fundamental thing I believe is that food is a very basic need, and we are trying to build food in a very unique way. What we are actually saying is that today a lot of meals that people eat come from home and not from restaurants. But if we can make restaurant food more accessible, more affordable and equal or better quality than home-cooked food, then so many more meals can come from restaurants.
We believe there is a lot to be built. I think retail investors will see that and, of course, will make the right choice for themselves.
Will you stay primarily in food, or could we expect diversification going forward?
Our vision is to create happier everyday lives. On that journey, we have started with food. Food is, and will remain, core to us. But on the back of the capabilities we have built, we will keep trying new things and see how we can actually impact people’s time even more than what we have done till now.
But it will not come at the cost of the core.
You have picked up a stake in Grofers for about Rs 7,500 crore…
Grocery is something that we are trying in addition to that stake. We are also doing it greenfield. We are launching a marketplace model in grocery. As we go along, we will keep doing more.
One thing is very clear to us: We will do everything that we can to add to the trust that the Indian consumer has shown in us till now.
You had attempted a new market place for grocery in 2020, it did not work out the way it had been envisaged. What will you do differently this time?
Last time what we did was actually in response to Covid. At that time, the food delivery business had come down and people were not ordering food. The most important thing for them was grocery. So we launched grocery for our customers because that is what they wanted at that point of time.
Then we took a break from that when food delivery came back up. Now we are experimenting grocery and trying to find the right answers as to how to do this. As we go deeper into it, we hopefully will find better answers, and then we will scale it.
And we are not sticking to any one approach. We might even try multiple approaches.
One of the objectives of the IPO is to raise money to look at M&As to grow inorganically…
Inorganic growth is just one of the channels that we keep exploring. I think in the future if we actually have some meaningful M&As to do which can help us in building out our vision, we are always open to that.
But it is just one of the channels. I think both organic and inorganic will be there in the future as drivers of growth.
You have not delivered a profit yet and the red herring prospectus does say you may not deliver profit for many years…
The way we look at it, there are existing businesses that will mature over a period of time, and then you continue to make new investments into growth for the future. At Zomato we are very keen to do both. As a combination, we will see where it gets to, but we are very clear that as our existing businesses scale and become more mature they have to be better in economics.
We will continue to use those investments to invest in growth and in the future. I think it is a good place to be because investing so much then you have so much growth in front of you and there is so much opportunity in front of you and that is exciting. We are so excited to build the food opportunity in India and be the frontrunners in that.
What else can it be in the food opportunity? Can you share it with us?
Even today, we do not do just delivery. We are a food ecosystem player. We allow users to interact with restaurants for whatever they need — whether it is food orders, whether it is going out for dining, or whether is reviews and ratings.
Even for restaurants, we do not just provide food orders. We provide diners to them, we also supply raw materials to them. So it is a whole food ecosystem that we are building. That is why users and restaurants actually love working with Zomato.
Any fears that your competitors would put more pressure on you? Any coming price war?
Even after the listing, I do not think we are going to change the way we work. That is not going to happen. We are going to build the business the right way like we have been doing till now and we will continue on our journey. That would not change.
What is your take on Zomato’s valuation?
Gaurav Gupta: Valuation is always based on current business strength and future business potential. That is the first logic. That is how the banking community and the existing investors and new investors have been able to arrive at it.
The good thing is, I think there are enough benchmarks out there for people to compare us against.
Some brokerage reports say you will break even in two to three years?
I think they know more than what we do. We only know what we are doing right now. That is more important for us, and we will see how it unfolds in the future.
What was your road show like?
Gaurav Gupta: These times are very different compared to what it was with Amazon some 20 years back. There are enough examples out there now. People have seen what it means to build a hyper growth business like ours, and what it takes to build such an opportunity.
We have had very interesting conversations, with a whole host of people that we had not spoken to earlier. It is great to have heard their perspective, discuss Zomato with them. I think there is way more education out there than we think there is.
