Zomato has made history by becoming the first Indian startup to be included in the Bombay Stock Exchange (BSE) Sensex 30, replacing JSW Steel Limited. This landmark achievement highlights the growing influence of tech-driven startups in India’s corporate ecosystem. Zomato’s robust performance, marked by a fivefold rise in net profits and substantial revenue growth, has solidified its position as a key player in the food tech industry. With its shares experiencing a massive rally, the company’s inclusion in the Sensex 30 is expected to generate fund inflows of ₹4362.35 crore. This milestone reflects Zomato’s relentless focus on innovation and profitability, making it a trailblazer among new-age tech companies in India.
Understanding Zomato: Business Model, Founders, and Milestones
1. zomato’s Business Model
Zomato operates as a food delivery and restaurant aggregation platform. It connects users with restaurants for dining and online food delivery, offering a seamless experience through its app and website. The company has also ventured into quick commerce through its acquisition of Blinkit, catering to the fast-growing demand for grocery deliveries.
2. Revenue Model
Zomato’s revenue streams include:
- Delivery Fees: Charges levied on users for food delivery services.
- Restaurant Commissions: Fees collected from restaurants for listing and order facilitation.
- Subscription Services: Zomato Gold and Pro memberships provide exclusive benefits to users.
- Advertising: Restaurants and brands leverage the platform’s vast user base for promotions.
3. Funding Background
Zomato has raised significant capital through multiple funding rounds. Notably, the company secured $1 billion from qualified institutional investors (QIIs) in November 2024. This fundraise, its largest as a listed entity, highlights investor confidence in Zomato’s growth potential and market leadership.
4. Founders’ Vision
Founded by Deepinder Goyal and Pankaj Chaddah in 2008, Zomato began as a restaurant review platform called “Foodiebay.” Deepinder Goyal, an alumnus of IIT Delhi, has steered the company through various growth phases, emphasizing customer satisfaction and technological innovation.
The Journey to Sensex 30 Inclusion
1. Performance Metrics
Zomato’s inclusion in the Sensex 30 is backed by its stellar financial performance:
- Revenue Growth: Operating revenue surged 68.5% year-on-year to ₹4,799 crore in Q2 FY2024-25.
- Profitability: Net profit rose fivefold to ₹176 crore in the same quarter.
- Market Capitalization: Valued at ₹2.72 lakh crore, Zomato has outpaced several traditional industry giants, including JSW Steel.
2. Stock Performance
Zomato’s stock has rallied impressively:
- 38% growth in the past six months.
- 126% surge year-to-date.
This performance underscores improved unit economics and strategic business expansions, particularly in the quick-commerce segment.
3. Strategic Decisions Driving Growth
- Acquisition of Blinkit: Strengthened Zomato’s presence in the quick-commerce market.
- Edgy Communication Strategies: Created a distinct brand voice, engaging diverse demographics.
- Diversified Investments: Expanded into allied sectors, ensuring long-term growth sustainability.
Impact of Sensex Inclusion
1. Significance for Zomato
Being part of the Sensex 30 marks Zomato’s transition from a disruptive startup to an established corporate entity. This inclusion:
- Enhances Visibility: Boosts Zomato’s reputation among global investors.
- Attracts Passive Investments: Expected fund inflows of ₹4362.35 crore into its stock.
2. Broader Implications for the Ecosystem
- Tech Companies in the Spotlight: Highlights the increasing prominence of tech-driven businesses in India’s corporate landscape.
- Boost for Startups: Encourages other startups to aim for similar milestones.
Background Story: From Startup to Corporate Giant
Zomato’s journey began in 2008, revolutionizing how Indians interact with food. Initially a restaurant review platform, it expanded into food delivery in 2015. Over the years, Zomato has adapted to market dynamics, investing in technology, logistics, and customer experience. The acquisition of Blinkit further diversified its offerings, cementing its leadership in the foodtech space.
The company’s IPO in 2021 was a watershed moment, setting benchmarks for other startups aiming to go public. Its subsequent performance has demonstrated resilience, adaptability, and a clear focus on profitability, culminating in its Sensex 30 inclusion.
Learnings for Startups and Entrepreneurs
1. Adaptability is Key
Zomato’s success underscores the importance of adapting to market trends and customer needs.
2. Focus on Profitability
Sustained profitability attracts investor confidence and ensures long-term viability.
3. Strategic Investments Pay Off
Investing in complementary sectors, like Zomato’s acquisition of Blinkit, can bolster growth and market positioning.
4. Leverage Branding
Effective communication and branding create a lasting impression, essential for customer and investor engagement.
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