New Delhi : Hitting back at HSBC analysts for marking down its valuation by half at $500 million, online restaurant guide and food ordering firm Zomato said on Monday that investors have backed the current valuation.

In a mail to the company’s 2,100 employees, Zomato Founder and CEO Deepinder Goyal hit out at the HSBC report and said the “assumptions and statements” make it look like “they’re coming from someone who doesn’t – and hasn’t bothered to – understand the space well”.

Founder and CEO Deepinder Goyal said Zomato has doubled its revenue over the past nine months and reduced its cash burn by 70% from its peak

Goyal claimed that Zomato is the leader in 18 out of the 23 countries it counts a presence in, and has 8.5 million monthly uniques in India alone as of April, adding that very few Indian companies can claim that much traffic share in a single category.

Stressing that “nobody who knows our business has marked down our valuations”, Goyal said “In fact, our existing investors are bullish about us and are willing to back us further, if needed. And they have categorically said that our valuations are justified”.

In a point by point rebuttal of the report, he said Zomato has been “more than doubling year on year, and the next year looks even more exciting for us. But external perceptions of valuations are determined by the state of the market, and the availability of facts to the person who is analysing these numbers.”

Highlighting the company’s growth, Goyal said: “Our ad revenue has doubled over the past nine months. Costs have been rationalised. Burn is down 70 per cent from the peak – it was high because we were experimenting with various business models and geographies, which we have cut down drastically – and we are now focused on the large opportunity in front of us in our core business and core markets. “We do not need to raise another round of funding to sustain the business, or steer it to profitability.” Goyal countered the claims that Zomato hasn’t been profitable in any of the 23 markets that it is present.

“The report goes on to say that it is unlikely we will hit profitability in our markets in the near term. But we already have, and we made an announcement when it happened,” he wrote in the mail.

“We are aiming to hit overall profitability (without compromising on growth) at an overall company level in the next 6-12 months – depending on how well we execute in the near future,” Goyal said.

In February, Zomato had said that it had become profitable in six regions, including India, after achieving operational break-even of its businesses. The other regions were the UAE, Lebanon, Qatar, the Philippines and Indonesia.

Goyal claimed HSBC never spoke to the company’s management before filing the report to get an understanding of the company’s business.

On claims that Zomato needs to heavily invest in building last mile logistics on its own, and win in the order business to defend its advertising business, Goyal said: “delivery is a small part of our advertising business”.  Most of the company’s advertising revenue comes from the dining out and nightlife categories, he added.

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