<p><strong>Why Are Startup Valuations So High? The Case of Zomato and Growth-Driven Valuations</strong></p><p>Startup valuations often spark debates. "Mind-numbing," "unrealistic," and "without any base" are common reactions in social circles and among traditional business owners. But as a corporate finance professional, let me break it down—and I’ll use Zomato, one of India’s most celebrated unicorns, to explain why these valuations make sense.</p>		
					<h5>1. The Scale of Growth Opportunity</h5>				
		<p>Startups like Zomato operate in markets with huge untapped potential. When Zomato started as a food delivery platform, it wasn’t just about delivering meals—it was about reshaping an entire ecosystem. It leveraged the rapid rise of internet penetration, smartphone adoption, and changing consumer habits.</p>
<p><b> Example:</b> Zomato went from being a simple restaurant directory in 2008 to one of the most recognized food delivery platforms globally by 2021. The growth potential in such markets justifies the premium valuation.</p>
<p>Compare this to traditional brick-and-mortar businesses—expanding a physical store network or logistics-heavy operation is capital-intensive and time-consuming. A single Zomato app update could scale to millions of users overnight.</p>