Zomato’s investor churn points to change; Razorpay’s Ezetap acquisition furthers payments consolidation

What Zomato’s wider shareholder churn means

What’s the news? The sell-off by Zomato’s private market investors after the lock-up expired was more widespread than reported earlier, the company’s latest filings reveal. Besides Uber, another backer, Delivery Hero, made a complete exit amid a wider churn in the market. 

Several other financial investors, like early venture capital investor Sequoia Capital India and hedge fund D1 Capital, also made a partial exit. We wrote about share sales of Tiger Global and Moore along with Uber in an earlier edition here.

Digging Deeper - Delivery Hero sold off its entire shareholding of 1.36% for about $60 million in July. This was around when Zomato’s share price was at a 52-week low, trading between Rs 41 to Rs 46 in late July. 

Delivery Hero originally picked up the shares as part of a side deal in early 2019 when it acquired Zomato’s food delivery business in UAE for $172 million. As part of the transaction, Delivery Hero also invested $50 million for a stake in Zomato. 

Overall, the exit does not give Delivery Hero great returns. But the company has also had a tough time, and combined with the rout of global growth tech stocks, has seen its own share price falling 80% from its highs.