top of page

Zomato's name changes to Eternal

What do Google, Facebook, and Zomato have in common?

Well, within a few years, they all have determined that a rebrand ought to assist them to enhance outcomes. They’ve followed a sparkling new appearance to scale new heights.

Google rebranded to Alphabet in 2015. Facebook has become Meta in 2021. And it looks like Zomato desires to be known as Eternal (at the least internally).

But there’s something else too…you see, in every case, traders have been additionally delighted whilst the information hit the market.

When Google rebranded to Alphabet, its stocks rallied via way of means of 5% over a subsequent couple of days. When Facebook morphed into Meta, the stocks jumped 6% quickly after the announcement. And whilst Zomato’s inner rebranding plan has become public, its stocks soared over 15% within an hour of the opening of the market.

But wait… Is this for real?

Do traders actually care about rebranding or is that only a glad coincidence?

Well, there are not a whole lot of studies on the matter. But we did find one paper from 2017 that tested 215 company logo modifications throughout a 20-yr period — from 1996 to 2015. And it concluded that during maximum cases, the common inventory rate rose via way of means of 2.50% on every occasion the employer introduced an alternate approach.

Why does this happen you ask?

Well, you see, if an employer is busy combating a whole lot of opposition in its number one domain, traders assume the employer to make a little noise and redial its imaginative and prescient. They accept as true with it’s the handiest manner the employer can live nimbly and maintain handing over value.

Like Apple in 2007 — whilst the employer became known as Apple Computer Inc the conventional enterprise wasn’t precisely developing exponentially. So it dropped the phrase

Computer and modified its call to Apple Inc and stated, “The Mac, iPod, Apple TV, and iPhone. Only one of these is a computer. So we’re converting the call.”

And traders have been delighted. They knew that Apple had already confirmed itself with new products. The handiest factor left to do became double down on that plan and construct its destiny. And the stock price jumped 11% immediately.

If you study Google too, it had a similar case at play. Google desired to expose that it wasn’t just a search engine. Thus, Alphabet a parent company was set up to showcase its ambition for growth. And following that google's business expanded from an advertising company to a product-based company with the launch of Pixel, G Cloud, etc.

This is an excerpt from the then-CEO of Google describing the idea —

As Sergey [Brin] and I [Larry Page, the CEO] wrote withinside the unique founder's letter eleven years ago, “Google isn't always a traditional employer. We do now no longer intend to come to be one.” As a part of that, we additionally stated that you may assume us to make “smaller bets in regions that would appear very speculative or maybe bizarre whilst as compared to our modern businesses.”

Then there’s Facebook, which named its parent company - Meta to expand into the metaverse space and cement itself as not just a social media company but a pioneer in the metaverse space with the help of Oculus.

And in the case of Zomato its parent company - Eternal showcases the company's entry into new markets. With the recent acquisition of Blinkit in June in a $568 Mn all-stock deal, Zomato has also entered into 10 min delivery space.

Zomato has additionally been making investments in more than one different entity. It has already invested over $1 Billion in serval startups such as a robotics meals company Mukunda, virtual marketing and marketing company - Adonmo, a health platform - Curefit which itself has become a unicorn, hyperlocal discovery enterprise - Magicpin, and a logistics company- Shiprocket.

Even internally, Zomato has wagered on tasks that could increase eyebrows — a video streaming platform, a foray into promoting Nutraceuticals like Whey protein. It even has plans to go into economic offerings and release its very own Buy Now Pay Later Product (we’ve written about it earlier).

This performs nicely into Zomato’s approach of being greater than only a meals transport app. The company is aware of it’s working in an aggressive area with little or no purchaser loyalty. They want greater drivers of increase and they want to hedge their bets additionally. And perhaps the excellent manner to get the crew aligned to that imaginative and prescient is to make it clear that the employer is Eternal. It’s boundless. It’s timeless. Sometimes, it wishes to take bets that would appear and sound silly. Some of those bets will work. Some of them won’t. But it wishes to take those bets to adapt and survive.

In 2019, Zomato’s CEO wrote a weblog put up approximately how he sees dangers. And one sort of danger he became excited to take became what he knew as “Multiplier danger.”

"This is whilst you're taking a danger which isn't always existential; will be huge enough, and if it performs out nicely (a.k.a if it works), then you get multiplier returns. ‘Multiplier’ begins off evolved with at least 2x outcomes. Anything else, consistent with me, isn't always a multiplier outcome, simply an additive outcome. I am now no longer announcing that a 2x multiplier impact is a super outcome — it's miles a slightly satisfactory multiplier. Relative to a huge (however non-existential) danger, multiplier dangers must goal for at least 3–5x return/outcomes."

Could this new direction that Zomato (or Eternal) is forging be one such multiplier danger for the employer?


bottom of page