PremiumIn his first interview since the landmark IPO, Zomato founder and CEO Deepinder Goyal spoke on a range of themes, including the IPO, competition, company culture, tackling mental health challenges, and plans for his wealth
Will India’s stock markets accept a loss-making company going public, and learn to value tech companies like private investors do? This question was emphatically answered with 13-year-old food tech start-up Zomato’s blockbuster IPO last month. The stock, which listed at Rs76 apiece, rose on listing and closed on Monday at Rs138.45. The listing appears to have opened the floodgates of tech IPOs as a number of start-ups are now lining up listings.
In his first interview since the landmark IPO, Zomato founder and CEO Deepinder Goyal, who started the company in 2008 as a menu listings platform and grew it to a $13 billion publicly traded food delivery company in 13 years, spoke to Sruthijith KK on a range of themes, including the IPO, competition, company culture, tackling mental health challenges, and plans for his wealth. Edited excerpts:
In retrospect, do you feel you could have raised more money from the public markets?
I think we raised the right amount of money. We only have plans for the amount of money we raised. And I think in the future if we need to raise more money, being a public company makes it easier.
How do you react to the response to the Zomato IPO? Was it expected?
It was not expected at all. We spent zero dollars on marketing the IPO. So, we were pseudo-scared whether we would make it. Users love us, customers love us, so we were all banking on customer love for the IPO. And it turned out great. We were sort of overwhelmed with the 360-degree love we got over the last couple of months. I think the first day of the three-day window when people subscribed for the IPO, we were getting so much love. All founders, competition, VCs who backed competition, everybody was sending us love. And that night I was scrolling through Whatsapp and I had 400 unread messages. That just never happens. The only person who would feel that much or more love than what we felt during those periods, can only be Sachin walking out to bat at the Wankhede Stadium in Mumbai. That’s the only thing that can come close. Nothing else. And I was like, leave all this money and valuations aside. People should be building start-ups for this.
What does this mean for running the company? You have always been particular about running the company on your own terms and not letting investors dictate terms. Now there are quarterly results and the pressures of running a public company. How are you going to not let that pressure influence your decision making?
I think there are two aspects to this pressure. One is whether you really care about the short-term stock price or not. The second is what do you really have to do on a day-to-day basis. Now, we are clear that we don’t care about the short-term stock price. Actually, I haven’t looked at the stock price since the day of the listing. It’s only when somebody is talking around, that’s when we get to know. Friday was the listing. Monday morning I’d forgotten that we are a listed company. It’s like back to work. Zero recollection that this is also something that’s going on there. So, I think we are not going to worry about stock price. So, that leaves the fear aside. And on a day-to-day basis… see, earlier we used to run the company on a month-to-month basis. Now, we run the business on a quarter-to-quarter basis. There is much more room for thinking and doing long-term stuff than month-to-month because companies like ours are always raising money. So, when we are private and raising money all the time, every month matters. Because VCs and investors ask for monthly P&Ls.
So, actually, it has become easier?
It has actually become way easier.
Is that a good thing?
That’s a great thing. I think earlier we would spend 50% of the time on long-term stuff. Now, you can spend 70% of the time on long-term stuff. So, those tweaks, those little degrees of freedom that you get, helps you take more right calls than wrong. We are feeling very free and liberated by being public. It doesn’t feel like a constraint to us. And I think it’s a combination of reality as well as the mindset that we have forced ourselves to have.
You have created a lot of wealth for Zomato employees. What are your thoughts about wealth generation within the company and among employees?
I don’t have thoughts about that. Those guys worked hard, they made money. Great. I can’t take credit for it. I think it’s the other way round. These guys have worked so hard to make me money.
Does being a listed company change your competitive position vis-à-vis Swiggy in any way?
No, we don’t think about competition at all. It has been a while since we haven’t. That has helped us, so we don’t see a reason to change anything now.
What would you say have been your key failings both as a leader and as a company?
Failures are temporary. I think I don’t fixate myself on the past. If you ask me for learnings, I might have a better answer. But I don’t know about failures.
Tell me the learnings then. Or takeaways from this journey that might be valuable to others who are trying to undertake a similar journey?
I think one of the biggest things is there’s this dialogue from Netflix series Star Trek: Discovery that says ‘Universal law is for lackeys. Context is for kings’. Leave aside the sexism in kings as opposed to queens, this is one of my biggest learnings from, I’d say, my series of failures. People say I did this, I made a mistake, I will not do these things again. That’s a terrible way of thinking. You failed because you did this in a certain context. So, the combination of your actions and that context led to your failure. So, the same actions, in a different context, might actually work. So, extending this, I think the big learning is that nothing is true or false. Nothing is right or wrong. You have to be thinking fresh and thinking first principles all the time.
You have invested in Grofers. You are reportedly investing more in Grofers. Is there a potential integration in future or a merger in future? What is your overall play in groceries?
We want to deliver groceries. Last week we launched it for a small customer base in Delhi. We are doing it on our own. We have also invested in Grofers, these are two different models, we don’t really compete. Even if we do, we are okay with that. It’s a separate company. We are a small 10% shareholder, it is not big a deal.
There’s a lot of dissatisfaction among at least some groups of restaurant owners about the sheer power that platforms like yours hold. And there are active efforts to try and disintermediate these platforms and serve customers directly. There are now companies that are helping restaurants do that. Is there disruptive potential in any of these efforts?
Disruption is always in hindsight, so all of these could disrupt us, I don’t know. We are watching, we are doing our work, our restaurant partner NPS (net promoter score) is at an all-time high. It’s improving every week and we are doing our job. So, I think largely 95%-plus restaurant owners are super happy with us. Because of the negative voices you have heard, it’s hard for them to say they actually love us.
What about delivery partners? There’s a view that your delivery partners could be better compensated, that they get a raw deal. Is there anything that you are looking to do to get them better financial outcomes?
Everyone seeks better financial outcomes. You do as well, I do as well, there’s no end to “better". We do what we can do, and we still make losses. We use tech to make sure their earnings per hour keep going up, but there’s nothing overnight that we can do. This is a money-in money-out business. We can’t have more money going out of the business than the money coming inside the business. Our rider NPS is so high. They say look I have a job, I’m able to feed my family, I make more money than I was making as a driver, I make more money than I was as a restaurant waiter, this is really good, thank you. That’s the general sentiment. In terms of working conditions, we provide insurance, we do training, we do grooming… At the end of the day, it’s about whether you are getting a fair wage for your effort. The narrative of more—I understand and respect the sentiment, but it’s not possible. People come here to work with us because this is a better income-earning opportunity than anything else out there. Then I don’t get why we are being crucified here. It’s their choice. To all the people who complain about this, I would urge them to create a platform where they can create better jobs for these 200,000 people. We will send these guys to those platforms so that they can get better terms and we will find a different part of the society to be able to empower them to do better than they are doing right now. That’s how it should work. I think the team is doing a great job. We are always focused on doing more for them, doing better for them.
Does anything change for the delivery partners now that you are a public company?
Nothing.
Your IPO represents several milestones. You are the first among the new wave of consumer internet companies to go public. You are a loss-making company that went public. It opens up the doors for a lot of other start-ups. It increases the flow of investments into Indian start-ups because exits are now easier. What are the most satisfying things for you that Zomato helped accomplish for the ecosystem?
I have got a ton of emails saying: ‘I too will start a startup.’ I think that was good to hear. Because we need change. We need more startups coming up, creating value. One other thing that I heard was I will domicile in India and I will go public in India. I don’t have a nationalistic reason. For me, if we are trying to build long-term companies, we need to have our customers participate in the ‘wealth accumulating’ period. How else are we going to make money for the country at large? And you have to be incorporated in India. You have to be listing in India for that cycle to come back and, like, literally put all companies like ours on an accelerated path of growth. That’s my long-term view. Twenty years out, this country is only going to grow if companies like ours domicile here and list here. Everybody needs to make money. Companies like ours are responsible for making sure everybody has that opportunity.
There were regulatory changes that ultimately enabled you to list here. Did you work behind the scenes with regulators, did they consult you? Did you make representations to make these changes happen?
No. A lot of the groundwork was already done, nearly half of it. We were the first ones to raise a lot of new questions. It was a joy working with the regulators, to be honest. They were very receptive to feedback, to changes, to alterations, to context.
So, in this whole tech IPO boom, do you think Sebi’s role has been underappreciated?
Absolutely. It was almost like working with a private company or a start-up. It was really good working with them.
You have dealt with your share of critics during your entire journey. So, now that you have listed and there’s been a public recognition of value, do you feel vindicated?
No, I think all of this is temporary. Every good thing that comes our way, all the love, it’s all temporary. It’s a butterfly effect. Something somewhere will happen and everybody will be up in arms against us. We would actually have nothing to do with what happened, so all this just happens. There’s no vindication. You just have to remain centered and keep doing your work.
Through all your experiences of ups and downs, did you ever come close to giving up in all these 12-odd years?
About a couple of times every week?
You can’t be serious.
There were some low moments every week, when you kick your chair and say, why did you do this, or how did this happen.
But did you seriously ever consider quitting?
(Long pause) Quitting, no. Giving up, yes. There’s a difference. Quitting is the last mile of your depression cycle. Giving up is somewhere in the middle, I have thought about it so many times.
Do you deal with mental health challenges?
I think I’m depressed all the time.
But it is one thing to think you are depressed, and another to be diagnosed as such by a psychiatrist.
The psychiatrist has diagnosed me with multiple things. Let’s not even go there. (Laughs)
Have you sought therapy or medication?
Yes and no. I have had those things. But you have to have sensible friends with whom you can talk about these things. That’s also a kind of therapy. Therapy doesn’t always have to come from professionals. I think if we have got a good, trusted bunch of people who love each other quite a lot, so that’s therapy here. That lifts you up.
Did you ever think that look I’m going to stop doing this. I’m going to find x or y person to run this company.
That’s my forever thing. I want to be doing what I want to do here. But there should be multiple CEOs to do this. To a very large extent, my CEO tag is actually just a title, which more often than not just comes in the way of work… If the world would accept it, then Zomato would be a completely title-less organization. And you can’t make it title-less if your CEO has a title. It needs to start from there. But I don’t think anybody is ready for that yet.
When we talked a few years ago, you said you find it difficult to spend more than ₹2 lakh a month. Has that changed? What are your plans for the substantial wealth you now have?
In my head, I haven’t made wealth. I am still the same. I don’t know. My self-image has to change first, before I think of these things. Even these valuations, they are all temporary. They are all based on hope. We have to deliver on these yet. It’s not done yet.
But that will always be a moving target, right? From what you started to now, you have built a multi-billion dollar company.
Yes, that’s fine. I’m not going to definitely do anything with that (personal wealth). Finally, everything I have earned is going to charity. Where else will it go? There’s no other path.
Well, your daughter can inherit it?
She should make her own money. Why will she need all this?
So, you plan to give most of your wealth to charity?
I hope so.
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