“We have zero skeletons in the closet,” Zomato* Founder and CEO Deepinder Goyal said in the company’s letter to shareholders while addressing concerns around the company’s acquisition of BlinkIt. Moreover, Goyal clarified that BlinkIt was evaluated objectively By Zomato and the company undertook extensive deliberations to arrive at a valuation. “We had multiple external advisors who helped us with various aspects of the transaction, including valuation which was done by EY, and we took an independent fairness opinion from Morgan Stanley,” Goyal said. Why it matters: The company had been under fire lately for acquiring BlinkIt at a valuation which was considered to be exorbitant by many as the startup was a struggling one. The acquisition led to a freefall in Zomato’s stock price and led to an erosion of billions of rupees in Zomato’s valuation. The company’s financial results are critical as they provide an insight into the financial health of tech start-ups. The investor sentiment towards tech startups has become subdued lately as the bear market digs its heels into stock exchanges. Goyal’s rationale to acquire BlinkIt: Goyal started off by reiterating that the acquisition has been approved by nearly 97 per cent of the shareholders. He rejected the charge that the deal is bad for shareholders because of his stock-linked compensation. There were questions around the deal because Akriti Chopra, one of the Co-founders at Zomato, is married to Albinder Dhindsa who is BlinkIt’s Founder and CEO. Goyal elaborated that the relationship was public and not hidden.…
What did Zomato CEO Deepinder Goyal say to shareholders in defence of BlinkIt’s acquisition?
Zomato, the Indian food delivery giant, defended its acquisition of BlinkIt that had left investors jittery, as Uber may offload 8.4% equity amid own losses
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