India I Equities Pre-IPO Note

11 May 2021

Zomato Rating: NR

Huge addressable market, but business is tough and competitive

Food aggregator Zomato has filed a draft prospectus with SEBI for a

~$1.1bn issue (Rs82.5bn), comprising a fresh issue of Rs75bn and an Particulars FY19 FY20

OFS of Rs7.5bn. (Info-edge now has an 18.55% stake.) The company (Rsm) Revenue EBITDA Revenue EBITDA will be utilising Rs56.25bn (~75%) of the fresh issue to fund organic Zomato 13,126 -22,434 26,047 -23,046 (~Rs30bn) and inorganic growth (~Rs26.25bn). The rest will be used 11,283 -23,670 26,960 -39,080 for general corporate purposes. The IPO will be a test of Indian investors’ appetite for unicorns. Media reports say the company is eyeing a valuation of ~$6.4bn, ~24x FY21 (annualized) sales of Rs20bn, Zomato and Swiggy comparison Zomato Swiggy vs. DoorDash listing multiple of ~12-13x (annualized) 2020 sales in No of cities 526 ~500 Dec’20.IndiaMart, a B2B market platform, trades at EV/sales of partners 132,769 125,000 30x/20x FY21e/FY23e, respectively. Delivery partners 161,637 200,000 Huge addressable food-services-market opportunity exists. In2019 food consumption in India was ~$670bn, mostly driven by home-cooked food. Current Shareholding pattern (%) Current stake Food Services, defined as non-home-cooked food or food now Info Edge (India) Ltd. 18.6 contributes only ~10% to the food consumption market. This is substantially B.V. 9.1 lower than in global economies such as the and China where Holding Pte. Ltd. 8.3 Food Services contribute respectively ~54% and ~58% of total food Antfin Singapore Holding Pte. Ltd. 8.2 consumption. In FY20, Zomato generated marketplace gross order value of Internet Fund VI Pte Ltd 6.0 ~$1.54bn, ~2.3% of the market and we believe that the company is in the SCI Growth Investments II 6.0 early phases of broad market adoption. DeepinderGoyal, Co-Founder 5.5 Foodiebay Employees ESOP Trust Low cost of switching between offerings. Within the industry, the cost to 4.2 switch between offerings is low. Consumers have a propensity to shift to the ESOP 2014) D1 Master Capital Partners LP 3.8 lowest-cost provider and could be utilising more than one local logistics platform. Independent contractors that provide delivery services could use MacRitchie Investments Pte. Ltd. 3.7 Dunearn Investments (Mauritius) Pte 2.6 various platforms concurrently in an attempt to maximize earnings. Ltd. Restaurants could prefer to use the local logistics platform that offers the Kora Investment I LLC 2.5 lowest commission rates and adopt more than one platform to maximize their VY Investments Mauritius Ltd 2.5 order volumes. Kora Holdings II (C) LLC 2.2 Currently, a duopoly; threat of big players entering exists. Zomato and VYC20 Ltd 2.1 Swiggy have established a duopoly in the food-delivery market in India with a SE 1.6 Sequoia Capital India Growth combined ~90% market share. Amazon, which started its food delivery 1.3 service, Amazon Food, in Bengaluru last year in four zip codes, has expanded Investment Holdings I Glade Brook Private Investors XVII LP 1.3 to 62 zip codes now. Food delivery is free to its prime members. Even as it is Total 89.3 limited to one key market in India, Amazon Food is vigorously trying to undercut competition. Zomato,a strategic call to focus only on India market. Soon after its launch, Zomato started venturing outside; by 2012, it had set up shop in the Shobit Singhal UK, Dubai, , and many other countries. It had a two- Research Analyst pronged approach: launch its own product and buy out the competition. This did not work out and it wrote off its overseas investments. Now it has decided to focus only on the India market.

Anand Rathi Share and Stock Brokers Limited (hereinafter “ARSSBL”) is a full-service brokerage and equities research firm and the views expressed therein are solely of ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient. Disclosures and analyst certifications are present in the Appendix.

Anand Rathi Research India Equities

11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Quick Glance – Financials and Valuations

Fig 1 – Income statement (Rsm) Fig 2 – Balance sheet (Rs m) Year-end: Mar FY18 FY19 FY20 9M FY21 Year-end: Mar FY18 FY19 FY20 9M FY21 Net revenues (Rs m) 4,660.2 13,125.9 26,047.4 13,013.5 Share capital 1,744 2,438 2,524 4,234 Growth (%) 182 98 NA Net worth 12,105 25,994 7,098 63,327 Employee and operating exps 2,904.9 6,173.8 9,078.0 6,684.0 Debt 13 13 15 8 SG&A 2,680 29,386 40,015 9,467 Minority interest 84 -314 -65 -65 EBITDA -924 -22,434 -23,046 -3,137 DTL/(Assets) - - - - EBITDA margins (%) -19.8 -170.9 -88.5 -24.1 Lease liabilities 287 1,029 717 507 - Depreciation 291 431 842 1,032 Capital employed 12,489 26,722 7,765 63,778 Other income 210 851 1,380 663 Net tangible assets 49 398 364 220 Interest expenses 63 87 126 55 Net Intangible assets 608 694 2,788 2,037 PBT -1,069 -10,102 -23,855 -6,809 Goodwill 1,061 1,885 12,093 12,093 Effective tax rate (%) 0 0 0 -0.00192 Right of use assets 186 919 668 446 + Associates/(Minorities) 32 453 184 2 CWIP (tang. &intang.) 7 3 2 - Net income -1,037 -9,649 -23,671 -6,820 Investments (strategic) 96 73 - - Investments (financial) 8,197 21,373 3,239 46,611 Fig 3 – Cash-flow statement (Rsm) Current assets (excl cash) 1,461 6,398 6,251 5,418 Year-end: Mar FY18 FY19 FY20 9M FY21 Cash 2,081 2,387 3,599 3,060 PBT -1,069 -10,102 -23,855 -6,809 Current liabilities 1,255 7,407 21,239 6,105 + Non-cash items 345 -8,927 2,608 5,045 Working capital 206 -1,009 -14,988 -688 Oper. prof. before WC -724 -19,029 -21,247 -1,764 Capital deployed 12,489 26,722 7,765 63,778 - Incr./(decr.) in WC 76 1,879 131 -1,191 Contingent liabilities NA NA NA 977 Others including taxes -46 -277 -321 261 Operating cash-flow -693 -17,427 -21,436 -2,694 - Capex (tangible + intangible) -59 -465 -214 -26

Free cash-flow -752 -17,891 -21,651 -2,720 Acquisitions -22 -361 -0 - - Div.(incl. taxes) - - - - + Equity raised 9,700 22,645 3,916 47,650 + Debt raised -75 -1 - -6 - Financialinvestments - - - - - Misc. items (CFI + CFF) -8,337 -3,259 17,240 -44,097 Net cash-flow 2,080 306 1,212 -539

Source: Company, Anand Rathi Research

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Story in charts

Fig 4 – Revenue and Cost drivers for each of the service offerings Food delivery Dining out B2B Supplies (Hyperpure) Zomato Pro . Transaction-based . Advertising . Transaction-based . Subscription-based Revenue model . Advertising . . monthly transacting users . MAUs . restaurant partners . Membership fee . restaurant partners paying . Order frequency . Value of supplies per order . Pro members to advertise their products . AOV . Order frequency Revenue drivers . Commission rates charged to restaurant partners . restaurant partners paying for delivery and to advertise

products . Delivery cost . Sales team . COGS . Marketing spend Cost drivers . Discounts and marketing

spread Source: Company

Fig 5 – Contribution/order was negative in FY20, as company Fig 6 – 9M FY21 higher contribution margin driven by drop expanded from ~200 cities in FY19 to ~500 in FY20 in subsidies, lower delivery cost, rise in avg. order value (Rs) (Rs) 60 80 43.6 62.8 40 60

40 20 15.3 26.8 22.9 20 0 0 -20 -15.7 -7.3 -21.7 -20 -14.8 -30.5 -40 -40 -44.6 -60 -52 -60 i.Commission ii.Customer iii.Delivery cost iv.Discounts v.Other vi.Contribution i.Commission ii.Customer iii.Delivery cost iv.Discounts v.Other vi.Contribution and other delivery charge Variable Costs profit/(loss) [(i) and other delivery charge Variable Costs profit/(loss) [(i) charges + (ii) – (iii) – (iv) charges + (ii) – (iii) – (iv) –(v)] –(v)] Source: Company Source: Company

Fig 7 – Orders of DoorDash (US) was ~0.5x on average of Fig 8 – Listed in the US in Dec’20,DoorDash’s EV/sales Zomato’s in 2018-19, but GOV was ~4.5x due to average order dropped from ~20x on listing to ~10x now value ~8.3x Zomato’s (x) (x) 25 25

20 20 19.6

15 15

10 10 8.3 8.3

5 5.4 5.6 3.6 3.5 5 0 0.4 0.7 0 2018 2019

9M2020 Apr-21 Apr-21 Apr-21 Apr-21 Jan-21 Jan-21 Jan-21 Jan-21 Feb-21 Feb-21 Feb-21 Mar-21 Mar-21 Mar-21 Mar-21 Dec-20 Dec-20 Dec-20 Total orders Total Gross order value Average order value May-21 Source: Company, Anand Rathi Research Source: Company, Anand Rathi Research

Anand Rathi Research 3

11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Fig 9 – Global peer comparison Revenue ($ m) EBITDA ($ m) EBITDA margin (%) EV/Sales (x) Particulars ($ m) BB Ticker Mkt. Cap FY20 FY21 FY22e FY23e FY20 FY21 FY22e FY23e FY20 FY21 FY22e FY23e FY20 FY21 FY22e FY23e DoorDash DASH US Equity 44,051 885 2,886 3,703 4,689 -474 -109 144 327 -54 -4 4 7 NM 14.3 10.8 8.5 GRUB US Equity 6,157 1,312 1,820 2,229 2,565 129 43 125 221 10 2 6 9 3.5 3.9 2.9 2.5 TKWY NA Equity 14,819 466 2,331 4,981 6,401 11 191 -53 243 2 8 -1 4 12.6 6.8 3.0 2.3 Takeaway.com NV YELP US Equity 2,908 1,014 873 1,000 1,129 135 63 168 234 13 7 17 21 2.2 2.4 2.5 2.2 Source: Bloomberg estimates

DoorDash’s orders in the US were on average ~0.5x Zomato’s in 2018-19, but its gross order value was ~4.5x as its average order value was ~8.3x Zomato’s. DoorDash’s market GOV and orders in the US in 9M 2020 increased ~2x each from 2019, whereas Zomato’s GOV and orders in 9M FY21 have ~55% and 38.5% of FY20 levels, respectively.

Fig 10 – Zomato and DoorDash comparison DoorDash Zomato Particulars (m) 2018 2019 9M 2020 Particulars (m) 2018 2019 9M 2020 Orders (m) 83 263 543 Orders (m) 191 403.1 155.2 Y/Y growth % NA 216.9 NA Y/Y growth % NA 111.0 NA Marketplace GOV ($ m) 2812 8039 16485 Marketplace GOV ($ m) 776 1,580 832 Y/Y growth % NA 185.9 NA Y/Y growth % NA 103 NA Average order value ($) 34 31 30 Average order value ($) 4.1 3.9 5.4 Y/Y growth % NA -9.8 NA Y/Y growth % NA -4.8 NA Source: Company

Fig 11 –Historical events and Launches Years Zomato Years Swiggy 2011 First institutional fund raise by Company 2014 With just 35 orders in the first month of launch 2015 Launch of food delivery in India 2015 Received its first funding of 2mn Launch cloud kitchen and Swiggy pop (meal for one offering, though recently 2016 Launch of table reservation 2017 suspended this offerings) Launch Swiggy super (Subcription service), Swiggy stores (grocery delivery Launch of customer membership program (currently, ‘Zomato 2017 2018 services), Swiggy go (instant pick up and drop service) &Swiggy daily (home Pro’) cooked meals delivery service, though closed recently) Added capability of hyperlocal delivery platform by acquisition of 2018 2019 Expanded from 100 cities in 2019 to 500 cities Carthero Technologies Private Limited Launch Swiggy Instamart (discontinue its stores service and replace it with Launch of Hyperpure, a B2B supplies business for restaurant Instamart, where it promises to deliver groceries within 45 mins, currently 2019 2020 partners doing testing at Bengaluru and Gurugram market), Swiggy genie (deliver and receive anything) and Swiggy health hub (healthy food discovery platform) 2020 Expansion of food delivery business across 500 cities in India Acquisition of ‘ India Assets’ of ‘Uber Eats India 2020 Business’

from Uber India Source: Company, Anand Rathi Research

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

IPO details

Food aggregator Zomato has filed a draft prospectus with SEBI for a ~$1.1bn issue (Rs82.5bn), comprising a fresh issue of Rs75bn and an OFS of Rs7.5bn. (Info Edge currently hasan18.55% stake in the company.)

Objective of the offer To fund organic and inorganic growth initiatives ~Rs56.25bn (~75%) and for general corporate purposes (~25%).

Organic growth. The company expects to utilise at least 40% (Rs30bn) of the proposed deployment towards this. It needs to continue to invest in three core areas for the growth of its business: a) acquiring customers and users; b)delivery infrastructure and c)technology infrastructure. Ithas made such investments in the past, and expects these to continue to be critical for the growth of the business in future.

Inorganic growth. It expects to utilize at least 35% (Rs26.25bn) of the proposed deployment towards this. In recent years it has acquired and invested in businesses, technologies, services and products such as the acquiring CTPL and Tonguestun in 2018, UberEats India assets in 2020 and Jogo in 2021.

Acquisition of Uber Eats business The Group entered into an agreement dtd. 21stJan’20 to purchase ‘Uber Eats Asset’ in India, which is the core asset for 'Uber Eats Business' along with a Non-Compete and Brand License arrangement for India from Uber India Systems Pvt. Ltd.

Fig 12 –Particulars Particulars Amount (Rsm) Brand license 1,234 Non-compete obligations 1,354 Goodwill (UberEats assets) 11,171 Purchase consideration 13,760

Purchase consideration Shares issued at fair value 687 Share premium 13,072 Cash paid 0.2 Purchase consideration 13,760 Source: Company

Acquisition of Carthero Technologies Pvt. Ltd. On 1stFeb’18, the Group acquired 80.20% of the voting shares of Carthero Technologies Pvt. Ltd, a non-listed company based in India, which provides a technology platform for quick-delivery services enabling local retailers to ship products to customers directly with the help of mobile applications. On 26thMar’18, the Group acquired an additional 4.25% interest in the voting shares of CTPL for Rs479.4m in cash, increasing its ownership interest to 84.45%.

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Fig 13 –Particulars Particulars Amount (Rsm) Share in opening loss of the subsidiary 401.2 Share in equity 0.12 Goodwill arising on acquisition 922.12 Purchase consideration 1,323.44

Purchase consideration Shares issued at fair value 0.41 Share premium 1,293.62 Cash paid 29.43 Purchase consideration 1,323.46 Source: Company

Acquisition of Tonguestun Food Networks Pvt. Ltd. On 1stNov’18, the Group entered into an agreement to purchase 100% shares in tranches of Tonguestun Food Network Pvt. Ltd. The Group acquired TFNPL because the latter arranges outdoor catering, supplies prepared foodstuffs to individuals, firms and corporate bodies (end- customers) from caterers (merchants) and acts as an agent between end- customers and caterers (merchants).

Fig 14 –Particulars Particulars Amount (Rsm) Share in opening loss of the subsidiary -171.89 Share in equity 87.59 Goodwill arising on acquisition 823.67 Purchase consideration 1044.51 Source: Company

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Business model

Incorporated in 2010, Zomato has since grown from a single-service- category provider to a multi-category-service one, offering various services across food delivery, dining out, Hyperpure and Zomato Pro. Customers use its platform to search for restaurants, read and write reviews and view and upload photos, order food, book tables and make payments while dining at restaurants. On the other hand, the company provides restaurant partners with industry-specific marketing tools, which enable them to engage and acquire customers and grow their business while providing a reliable and efficient last-mile delivery service. It also operates a one-stop procurement solution, Hyperpure, which supplies high quality ingredients and kitchen products to restaurant partners. Besides, it provides delivery partners with transparent and flexible earning opportunities. At31stDec’20, Zomato was operating in 526 cities in India, with 350,174 active restaurant listings.

Fig 15 – Zomato’s revenue segments Particulars FY18 FY19 FY20 9M FY21 India Food delivery Avg MAU (m) 14 29 42 30 Y/Y growth% NA 112.3 41.6 NA Avg MTU (m) 1 6 11 6 Y/Y growth% NA 522.2 91.1 NA Active food delivery restaurants(in the last month of the period) 33,192 94,286 143,089 132,769 Y/Y growth% NA 184.1 51.8 NA No. of active restaurant listings NA NA NA 350,174 No. of active delivery partners NA NA NA 161,637 No. of cities 15 200 500 526 GOV (m) 13,341 53,870 112,209 61,699 YY growth% NA 303.8 108.3 NA No. of orders (m) 31 191 403 155 Y/Y growth% NA 524.2 111.0 NA Frequency of orders /month 2.8 2.8 3.1 2.2 Average order value (Rs) 436.0 282.0 278.4 397.5 Y/Y growth% NA -35.3 -1.3 NA Commission and other charges (Rs) NA NA 43.6 62.8 Commission and other charges as % of AOV NA NA 15.7 16

Food delivery revenue (Rsm) (A) 2,550 9,327 17,575 9,747 Y/Y growth% NA 265.8 88.4 NA

Dining-out revenue Avg. MAU (m) 14 29 42 30 Y/Y growth% NA 112.3 41.6 NA Active restaurant listings (m) NA NA NA 0.4 Restaurant partner paid for advertising products (no.) 15,000 NA 8,064 NA Paid members (m) 0.17 1 1.7 1.4 Y/Y growth% NA 488.2 70.0 NA

Revenue (Rsm) (B) 2,100 3,488 4,208 1,458

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Y/Y growth% NA 66.1 20.6 NA

Revenue from services (Rsm) (A+B) 4,650 12,814 22,908 11,204

Revenue from B2B supplies (Hyperpure) Number of restaurants NA 486 2256 6000 Y/Y growth% NA NA 364.2 NA Revenue (Rsm) (C) - 149 1,076 1,244 Y/Y growth% NA NA 622.6 NA

Provision of platform services (Rsm) (D) 0 163 2063 565

Revenue from operations (Rsm) (A+B+C+D) 4,661 13,126 26,047 13,013 Source: Company, Anand Rathi Research

Fig 16 – Unit Economics: Zomato’s take rate higher than global peers 9M FY21 FY20 Per order Per order Value As % of Value As % of Particulars basis basis GOV GOV (Rs) (Rsm) (Rs) (Rsm) i.Commission and other charges 62.8 9,747 15.8 43.6 17,575 15.7 ii.Customer delivery charge 26.8 4,159 6.7 15.3 6,167 5.5 iii.Delivery cost -44.6 -6,922 -11.2 -52 -20,961 -18.7 iv.Discounts -7.3 -1,133 -1.8 -21.7 -8,747 -7.8 v.Othervariable costs -14.8 -2,297 -3.7 -15.7 -6,329 -5.6 vi.Contribution profit/(loss) [(i) + (ii) – (iii) – 22.9 3,554 5.8 -30.5 -12,295 -11.0 (iv) – (v)] EBITDA (Rsm) -3,137 -5.1 -23,046 -20.5 Implied fixed cost+semi/variable cost 6,691 10.8 10,752 9.6 Source: Company, Anand Rathi Research

Fig 17 – Unit economics:DoorDash in the US 2018 2019 Particulars ($m) Amount ($ m) % of GOV Amount ($ m) % of GOV Marketplace GOV 2812 100 8039 100 Pass-through payments -2400 -85.3 -6796 -84.5 Refunds, credits -61 -2.2 -176 -2.2 Promotions -60 -2.1 -182 -2.3 Revenue 291 10.3 885 11.0 Adjusted cost of revenue -221 -7.9 -504 -6.3 Adjusted sales and marketing -129 -4.6 -581 -7.2 Contribution loss/profit -59 -2.1 -200 -2.5 Adjusted research and development -37 -1.3 -87 -1.1 Adjusted general & administrative -62 -2.2 -188 -2.3 Adjusted EBITDA -158 -5.6 -475 -5.9 Source: Company, Anand Rathi Research

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Industry

Food consumption in India was ~$670bn in 2019, mostly driven by home- cooked food. Food Services, defined as non-home-cooked food or restaurant food currently contributes only ~10% to the food market. This is substantially lower than in global economies such as the United States and China, where Food Services contribute respectively ~54% and ~58% of total food consumption. According to RedSeer, there is a large total addressable Food Services market opportunity of $65bn, growing9% a year to $110bnby 2025, with highly under-penetrated restaurant food-eating behaviour today.

Fig 18 – Comparison of India, US and China (2019) Particulars India US China Population (bn) 1.36 0.33 1.43 Access to Internet/Population (%) 43 88 63

Online food delivery market ($ bn) 4.2 21 90 Restaurant food / Food consumption (%) 10 54 58

Online food delivery users (m) 45-55 90-120 430-470 Online food delivery users/ Access to internet (%) 9 36 50 Source: Company

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

DoorDash: Comparable company, recently listed in the US

DoorDash’s journey began on 12thJan’13, when the founders launched a website displaying menus from local restaurants in Palo Alto, California. Today, it connects more than 390,000 merchants (restaurant partners), 18m consumers and 1m Dashers (delivery partners) in the US, and through local logistics platforms. DoorDash has become the largest and fastest-growing business in US local food delivery, with a 50% U.S. category share.

Fig 19 – Key business metrics Particulars(m) 2018 2019 9M 2020 Total orders (m) 83 263 543 Y/Y growth% 216.9 106.5 Marketplace GOV ($ m) 2812 8039 16485 Y/Y growth% 185.9 105.1 Average order value ($) 34 31 30 Y/Y growth% -9.8 -0.7 Contribution profit (loss) ($ m) -59 -200 433 Contribution margin (%) -20 -23 23 Source: Company, Anand Rathi Research

Fig 20 – DoorDashcategory share based on sales (US) Market Share % Company Jan-18 Oct-20 Doordash& Caviar 17 50 Uber Eats 27 26 Grubhub 39 16 11 7 Other 61 Total 100 100 Source: Company, Anand Rathi Research

The company started with focusing on suburban markets and smaller metropolitan areas. According to Edison Trends, the US local food delivery logistics category is larger in smaller metropolitan areas than in the top tier metropolitan areas and is growing faster. The company believes that suburban markets and smaller metropolitan areas have significantly higher growth than larger metropolitan markets, because these smaller markets have been under-served by merchants and platforms that enable on-demand delivery. Accordingly, residents in these markets are more acutely hit by lack of alternatives, the inconvenience posed by distances and the need to drive to merchants. Therefore, consumers in these markets derive greater benefit from on-demand delivery. Additionally, suburban markets are attractive as consumers here are more likely to be families (more items per order). Lighter traffic and easier parking also mean that Dashers can serve these markets more efficiently. As a result of its early focus on and experience with suburban markets and smaller metropolitan areas, the company is particularly better positioned for continued growth in these markets.

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Fig 21 – Industry growth, tier-wise in the US Tier (%) Tier 1 97 Tier 2 127 Tier 3 157 Tier 4 174 Others 142 Source: Company, Anand Rathi Research

Fig 22 – DoorDash food sales contribution-~64% of GOV comes from beyond tier- 1 cities Tier (%) Tier 1 36 Tier 2 39 Tier 3 8 Tier 4 11 Others 6 Source: Company, Anand Rathi Research

Over the years, the company has built three mutually-reinforcing assets:

Logistics If it can make possible delivery of ice cream before it melts, or pizza before it gets cold, or groceries in an hour, it can make on-demand delivery of anything within a city a reality. It started with restaurants because of the potential to build the most efficient logistics network with the highest node density, based on the large number of restaurants and the high frequency of delivery. It believes that by starting with food, it has created the most sophisticated and reliable logistics platform for local businesses. And, while food itself is a category that has a long runway for growth, it believes the network it has built ideally positions it to fulfil its vision of empowering all local businesses to compete in the convenience economy.

Merchants Logistics alone, however, will not help physical businesses compete. How do you acquire customers in a world where they no longer walk inside your stores? What products should you make today and in future? How should you price products? How do you build customer relationships over time? DoorDash is much more than an application that connects merchants, consumers and Dashers by facilitating delivery. It provides a broad array of services that enable merchants to solve mission-critical challenges such as customer acquisition, delivery, insights and analytics, merchandising, payment processing and customer support.

Membership program Over time, as DoorDash partners with local businesses beyond restaurants, it wants to make it easy and affordable for consumers to enjoy the best of their communities. To that end, it launched a membership program “DashPass”, where customers can pay a flat monthly delivery fee (today $9.99) for unlimited deliveries from eligible merchants. To date, these deliveries come primarily from restaurants. In future, the company envisions this membership program becoming a wallet for the physical world, where consumers can access not only restaurants but all local businesses in their communities, and receive benefits while shopping in- store, at home or anywhere in between.

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11 May 2021 Zomato – Huge addressable market, but business is tough and competitive

Zomato corporate governance

Fig 23 – Board of directors - Top level management team Remuneration Name of the Director/KMP Directorship in other companies (in Rs m) Promoter and executive director DeepinderGoyal (founder and CEO)* 19.68 1

Chairman and independent director 11 - NDTV, Newgen Software Tech, HCL Infosystemsetc, Cartherto Tech Pvt. Ltd. Kaushik Dutta 2.80 etc.

Non-independent,non-executive directors 12- Info-Edge, Startups Internet, High Orbit Careers, Calangute Advisory Pvt. Ltd. SanjeevBikhchandani (nominee of InfoEdge) 2.80 etc. Douglas Feagin (nominee of the ) 2.80 43- Ant Group, etc.

Independent directors AparnaPopatVed 2.80 1-Sportsvkan Pvt. Ltd. GunjanTilak Raj Soni 2.80 8- Red Carper Retail, Zalora, Jade e-Services Singapore, Reliant Logistics, etc. Namita Gupta 2.80 1-Airveda Technologies Pvt. Ltd. Sutapa Banerjee 2.80 8-JSW Group; Manappuram Finance, Godrej Properties, Axis Capital, etc.

Chief financial officer AkshantGoyal 32.63

Company secretary & Compliance officer SandhyaSethia 5.24 *Note:DeepinderGoyal has voluntarily waived his remuneration for 36 months starting 1stApr’21 and will continue to discharge his roles and duties as managing directorandchief executive officer during this period. Source: Company, Anand Rathi Research

Fig 24– Shareholders details Shareholders Current stake Comments Info Edge (India) 18.6 Offering shares worth Rs7.5bn in the offer The company entered into an agreement dtd. 21stJan’20 to purchase ‘Uber Eats Uber B.V. 9.1 Asset’ in India worth Rs13.76bn through an issue of shares Alipay Singapore Holding Pte. Ltd. 8.3 Antfin Singapore Holding Pte. Ltd. 8.2 Internet Fund VI Pte Ltd 6.0 SCI Growth Investments II 6.0 DeepinderGoyal 5.5 Co-founder Foodiebay Employees ESOP Trust ESOP 2014) 4.2 D1 Master Capital Partners LP 3.8 MacRitchie Investments Pte. Ltd. 3.7 Dunearn Investments (Mauritius) Pte 2.6 Kora Investment I LLC 2.5 VY Investments Mauritius 2.5 Kora Holdings II (C) LLC 2.2 VYC20 2.1 Delivery Hero SE 1.6 Sequoia Capital India Growth Investment Holdings I 1.3 Glade Brook Private Investors XVII LP 1.3 Total 89.3 Source: Company

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Appendix

Analyst Certification The views expressed in this Research Report accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. The research analysts are bound by stringent internal regulations and also legal and statutory requirements of the Securities and Exchange Board of India (hereinafter “SEBI”) and the analysts’ compensation are completely delinked from all the other companies and/or entities of Anand Rathi, and have no bearing whatsoever on any recommendation that they have given in the Research Report.

Anand Rathi Ratings Definitions Analysts’ ratings and the corresponding expected returns take into account our definitions of Large Caps (>US$1bn) and Mid/Small Caps (US$1bn) >15% 5-15% <5% Mid/Small Caps (25% 5-25% <5%

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