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There were days when we used to call different restaurants to place orders and again call up for corrections and directions and reservations. Then came in applications like Zomato who reversed the whole scenario and made it extremely simple for the consumers. Deepinder Goyal and Pankaj Chaddah founded Zomato in 2008 that further aided this process of eating out and food delivery.
Zomato hits a valuation of $5.4 Billion on February 22, 2021, after its recent funding round on the same date led by Kora, Fidelity, Tiger Global Management, and others for $250 Million.
Know more about Zomato Success Story, Founders, History, Tagline, Funding, Acquisitions, Business Model & Revenue Model, Competitors, Revenue and Growth in the article ahead.
Zomato - Company Highlights
| Startup Name | Zomato |
|---|---|
| Headquarter | Gurugram, India |
| Sector | Food Delivery |
| Founders | Deepinder Goyal, Gaurav Gupta, Pankaj Chaddah |
| Founded | 2008 |
| Valuation | $8 Billion (July 2021) |
| Revenue | Rs. 2,604.7 Crore (FY20) |
| Total Funding | $2.1 billion |
| Parent Organization | Zomato™ Media Pvt Ltd. |
| Website | zomato.com |
Zomato - Latest News
About Zomato and How it Works
Zomato - Founders & Team
How was Zomato Started? Zomato - History
Zomato - Startup Launch
Zomato - Name, Tagline, and Logo
Zomato - Business Model and Revenue Model
Zomato - Hyperpure
Zomato - Zomato Payments
Zomato - Zomaland
Zomato - Startup Challenges
Zomato - Competitors
Zomato - Funding & Investors
Zomato - Acquisitions
Zomato - Growth and Revenue
Zomato - ESOPs
Zomato - FAQs
Ashwini
Zomato - Latest News
December 3, 2021 - Zomato has invested close to $100 mn in Curefit at a valuation of around $1.56 bn and is one of the leading investors of the fitness brand.
December 1, 2021 - Zomato is currently looking for ideal candidates to join the team having experience in investment banking. It is also inviting early and mid-stage institutional investors who want to explore equity investments in restaurants and cloud kitchens. The new Zomato Wings will serve as a "platform to connect restaurants with investors. We are identifying budding restaurants who could become the next big chain if they receive equity funding from growth-focused investors," mentioned Siddharth Jhawar, Zomato VP, Global Growth, on a Linkedin recruitment update.
November 30, 2021 - Zomato launches Zomato Wings as a platform to connect investors with the restaurants.
November 10, 2021 - Zomato sells out its fitness facility arm, Fitso to Cure.fit for $50 mn, which in turn, makes the foodtech giant the owner of around 6.4% of the shares of Cure.fit, worth $100 mn.
October 19, 2021 - Zomato fires its customer service executive after linguistic preference issues and raging reviews on Twitter. The company again reinstates the person in question after 3 hours.
September 14, 2021 - Zomato, Co-founder, Gaurav Gupta, who headed the supply of the food-tech startup, has resigned.
September 13, 2021 - Zomato also ends its brief stint with nutraceuticals and has removed the Nutrition tab on its app, which used to contain fitness supplements, wellness, and other nutraceutical products.
September 13, 2021 - Zomato has decided to shut down its grocery delivery service business with effect from September 17, 2021, as per the company's email to its grocery partners. It will not run any grocery delivery services anytime sooner, said Zomato spokesperson.
July 1, 2021 - IPO-bound food delivery giant, Zomato is at the final stages of acquiring around 9.3% stakes in Grofers, the rising e-grocer of the country as per the latest filing with the Competition Commission of India. Furthermore, Zomato is also looking to acquire equal stakes in Hands on Trade Private Limited, the wholesale entity of Grofers.
23 February 2021 - Zomato has closed a $250 million funding round, led by existing investors Tiger Global, Kora and Fidelity. Zomato's valuation touches $5.4 Billion.
25 January 2021 - Zomato Plans come up with an IPO in the first half of 2021. They will launch upto $1 Billion in IPO. After the recent fundraise of $500 million, the company is valued at $5.5 Billion.
22 January 2021 - Zomato raised $500 million from their existing investors along with Ant Group and Sunlight Fund.
December 19, 2020 - Zomato raised $660 Million in the funding of Series J round led by Kora, Tiger Global Management. This round hit Zomato's Valuation to $3.9 Billion
November 19, 2020 - Zomato announced that it will do away with commissions it charges restaurant partners on takeaway orders. In a bid to help them recover faster from the economic crisis endowed by the Covid-19 pandemic and also offer customers an alternative to home delivery.
To help the restaurant sector, we will also forego the payment gateway charges incurred on all such orders.
— Deepinder Goyal (@deepigoyal) November 18, 2020
We have already seen more than 200% increase in takeaway order volume in the last few months.
[2/n]
About Zomato and How it Works
Zomato is an Indian food delivery startup restaurant aggregator. Zomato primarily provides concrete information, menus, and user reviews of the restaurants. Along with this, Zomato also has food delivery options from partnered restaurants of the selected cities.
Zomato - Founders & Team
The founders of Zomato are Deepinder Goyal and Pankaj Chaddah. Both are IIT graduates and were working with Bain & Co in New Delhi before they came together to launch Zomato.
Gaurav Gupta, who initially joined as the Global Head of the Advertising sales of Zomato and COO and was later promoted to the Co-founder position of the platform, resigned on September 14, 2021. Gaurav headed the supply of the foodtech company.
Zomato has been shutting down some of its business lines and subsidiaries, including its grocery delivery service, nutrition and nutraceuticals, and a bunch of its international subsidiaries since the company went public in July. Gaurav Gupta's resignation starkly followed the decision of the company for taking down their grocery delivery and nutraceutical services.
On his parting, Gaurav Gupta had drafted a beautiful mail that he sent on to everyone at Zomato with a special address to Deepinder Goyal.
Zomato CEO, Deepinder Goyal had not failed to reply to the touching mail that can be viewed here: https://www.zomato.com/blog/always-in-love-with-zomato
Furthermore, Deepinder also tweeted on the exit of his co-founder, thanking him for the amazing journey they spent together. Here goes his Tweet:
Thank you @grvgpta – the last 6 years have been amazing and we have come very far. There's so much of our journey still ahead of us, and I am thankful that we have a great team and leadership to carry us forward.https://t.co/AJAmC5ie6R
— Deepinder Goyal (@deepigoyal) September 14, 2021
The Zomato recruiting team is of the ideology that hiring the correct people is primary for their company's startling growth. Also, recruiting this pool of employees was one of the major milestones achieved while building the foundation of Zomato. Now, the company has a squad who are vital in bricking their dream project.
Shubham Kumar
How was Zomato Started? Zomato - History
All of it started when the founders, Deepinder Goyal and Pankaj Chaddah were in their office in New Delhi and they came across so many people who were waiting for a long time just to acquire a flash of the menu card. And in that exact moment, the idea for obtaining a solution was planted in this duo’s minds and that led them to launch Zomato, formerly known as ‘Foodiebay’.
Zomato turned 13 this July 2021, and the brand celebrates its birthday in style on July 10, 2021. Pramod Rao, who served Zomato as the VP of Marketing and has had a big hand in building the marketing team and scaling up the operations of the brand shares his message congratulating the brand along with a jovial video of the brand at work on July 10, 2021, via his Linkedin profile.
Wondering what they begin with? They uploaded the soft copies of the menu cards on the website. Following this, everyone in the office started using this which led to a lot of time-saving for them. Subsequently, this increased the traffic on their website and soon enough they expanded their website to make it available to everyone in the city.
Varad Kitey
Zomato - Startup Launch
When the founders launched this website, it wasn’t called Zomato back then, it was called Foodiebay. And it initially started out in Delhi, then the services were extended to cities like Mumbai and Kolkata.
With the tremendous user base and growth rates that Foodiebay brought in to the founders, they decided to modify it and take it international. And that’s when this venture started being called Zomato, as we know of it today. It was in 2010 when Foodiebay was officially rechristened as Zomato.
Zomato - Name, Tagline, and Logo
The founders changed Foodiebay to 'Zomato' to make it more prominent, simple to memorize and primarily to eliminate the confusion with the website eBay.
Zomato's tagline is "Never have a bad meal".
Zomato - Business Model and Revenue Model
The main source of revenue for Zomato now is the advertisements channel that the portal offers to display. This accounts for most of its revenue followed by the commissions that it charges to the restaurants. It works on a commission business model.
Zomato decided to shut down their grocery delivery service as per the reports dated September 13, 2021. The company has informed its grocery partners via email that the company will put an end to its pilot service with effect from September 17, 2021. While addressing the same a Zomato spokesperson said, "We have decided to shut down our grocery pilot and as of now, have no plans to run any other form of grocery delivery on our platform," a Zomato spokesperson said.
The food aggregating giant had started its grocery delivery business when the Covid-19-induced lockdown was announced in 2020 and the restaurants and eateries were closed all of a sudden. However, ever since India started unwinding, Zomato has been back in line with its food delivery service. This is why the company had earlier stated that it would be scaling down its grocery deliveries in September 2020, within barely five months of its launch. However, Zomato again resumed delivering groceries online through its apps post-IPO, but the company has finally decided to shut it down completely, as of September 13, 2021.
The cause of such a decision can be associated with poor customer experience, gaps in order fulfillment, and the sudden surge in competition from its rivals post-lockdown. The food delivery giant has invested around $100 million in the grocery delivery platform, Grofers, and believes that the investment would be generating better income for the company than its effort to boost in-house grocery delivery.
Zomato reportedly closed its Singapore and United Kingdom (UK)-based subsidiaries in August 2021. The closure of the businesses of Zomato has also been disclosed in its stock exchange filing on September 1. Previously the company has also wound up its US subsidiary Nextable Inc.
The company has also announced to pull down the shutters on its nutraceutical business hours after it declared to exit its grocery delivery business. The nutraceutical line of products consisting of health and fitness products was started in 2020. In view of tapping this opportunity, Zomato appointed Chief Operating Officer Gaurav Gupta as the head of this division for five years. Gupta was also quoted as saying, "This business can potentially be a large value driver for Zomato in the future," as soon as he was suggested the job role.
However, the company finally decided otherwise and had to take this harsh decision at a time when the government is looking to become stringent about private label norms for marketplace businesses in the country.
Vidhi Punamiya
Zomato - Hyperpure
Hyperpure by Zomato is changing the way restaurants work. It is Zomato’s B2B foodtech vertical. Hyperpure allows restaurants to buy everything online from vegetables, fruits, poultry, groceries, meats, seafood to dairy and beverages. It claims to be working directly with farmers, mills, producers, and processors to source these products thus ensuring quality and consistency.
It is an initiative by Zomato to provide fresh, hygienic, high-quality ingredients and supplies.
Zomato - Zomato Payments
Zomato announced the incorporation of a new subsidiary, Zomato Payments Private Limited, which will be wholly owned by the company. While filing, Zomato has disclosed that it has incorporated the subsidiary with a subscription of 10,000 equity shares of Rs 10 each aggregating to Rs 1,00,000.
The Indian food delivery giant is looking to work as a payment aggregator and offer payment gateway services, as per the RBI guidelines with its freshly incorporated subsidiary. The all-new Zomato payments will serve as a payment and settlement system, along with offering payment gateway services, and will also act as a payment solution for paying goods, services, and utility bills with the help of mobile phones.
Zomato - Zomaland
Zomaland is India's Grandest Food and Entertainment Carnival that brings together some of the top eateries, musicians, DJs, comedians, and interactive installations and carnival games, under one roof. It is like the offline version of its Zomato Collections, where it curates and brings the best restaurants in the city together.
It is a flagship event of Zomato. In 2018, The debut edition of this carnival across Delhi, Bengaluru, and Mumbai saw over 100,000 visitors. Since then it has grown to be held in over 10 cities and has also partnered with major brands including the Singapore Tourism Board.
Zomato - Startup Challenges
The most significant hurdle in the Zomato journey was to find a way to cover all the restaurants in all the areas in all the pivotal cities so that the consumers who hinge on them do not miss the finest restaurants in the locality. This milestone has been omnipresent since the inception and continues to drive considerable efforts on the venture’s part.
But this is not it. Time to time, Zomato was made to face quite a few bigger challenges that were "make or break" situations for the team. In 2015, Zomato had to lay off 300 employees to curb losses which obviously had large scale implications on the organization as 10% of this layoff was in the US. In the same year, in the States, Zomato had acquired Urbanspoon and rebranded the company as their own. Unfortunately, the rebranding did not come out as expected and the venture failed miserably.
In 2016, things went so out of control that as a result, Zomato had to roll back its operations in several countries including the US, UK, Chile, Canada, Brazil, Sri Lanka, Ireland, Italy, and Slovakia. And when they resumed presence, Zomato had to resort to remote services.
Then came the year when Zomato's existence went at stake when in 2017, it faced its biggest cyberattack with a hacker that had breached into 17 million user records from the company database. While its concerns were overpayment and user card & account details being accessed by the hacker, Zomato soon claimed that only the hacker could only have access to the names, user IDs, email addresses, usernames, and password hashes. Soon after, this breach was resolved by communicating with the hacker and as it came out he just wanted to prove that there were security loopholes in the system.
In 2019, the #logout campaign surfaced when the restaurants listed on the portal called out on it for eating into their profit margins through Zomato Gold and Infinity Dining features, a Zomato feature that provided heavy discounts. And it so happened that the restaurant association highlighted these issues like “unreasonably high commissions, payment terms and arbitrarily applied additional charges” that the restaurants were being charged to be a part of the Zomato initiative, Zomato Gold.
Post this campaign, Zomato discontinued the Infinity dining service, also revised and altered Zomato Gold rules while laying off, and also faced tremendous protests from the partnered restaurants.
Despite all of this, Zomato registered a rise of 177% of restaurant partners and got on board an additional 73K restaurants. Zomato has over 1.4 million listed restaurants and 12K+ restaurant partners aligned with its app, as of August 2021.
Zomato has seen a number of controversies and one of the recent is the incident where a customer service representative of the company didn't know Tamil and instead of giving a customer from Tamil Nadu a refund lectured him on the importance of knowing "Hindi", as the national language. The customer eventually took to Twitter and soon the #RejectZomato trend was popularized on October 19, 2021. This incident questioned the commitment of the food delivery major towards its non-Hindi speaking community of India and led to the expulsion of the customer support staff on the grounds of her behavior being “against the principles of sensitivity”. The leading food tech company also promised of establishing a local Tamil call center soon in Coimbatore. However, the customer support agent was reinstated after 3 hours of this incident. Zomato CEO, Deepinder Goyal later tweeted:
“An ignorant mistake by someone in a support center of a food delivery company became a national issue. The level of tolerance and chill in our country needs to be way higher than it is nowadays. Who’s to be blamed here?”
Ashwini
Zomato - Competitors
Though Zomato is very predominantly present in the industry, it does face a lot of direct and indirect competition. Zomato faces direct competition from Swiggy, and indirect competition from regional food delivery applications like SendMe, etc.
Rishabh Rathi
Zomato - Funding & Investors
To date, Zomato has raised close to $2.1 billion in funding. Recently (Feb 2021) Zomato closed a $250 million funding round, led by existing investors Tiger Global, Kora, and Fidelity. Zomato's valuation touches $5.4 Billion. In this round, Kora pumped in $115 million, while Fidelity invested $55 million and Tiger Global has invested $50 million.
Zomato raised funds worth Rs 4,196 crores from its marquee anchor investors, which is supposed to be a part of the anchor book allocation. This fundraising round comes a day before the brand goes public, as per the reports on July 14, 2021.
Info Edge India is Zomato's largest shareholder with over 18.4% stake
Here is a list of all the funding rounds of Zomato -
| Date | Stage | Amount | Investor |
|---|---|---|---|
| September 2011 | Series A | $3.5 Million | Info Edge |
| September 2012 | Series B | $2.3 Million | Info Edge |
| February 2013 | Series C | $10 Million | Info Edge |
| November 2013 | Series D | $37 Million | Info Edge, Sequoia Capital |
| November 2014 | Series E | $60 Million | Info Edge, Vy Capital |
| April 2015 | Series F | $50 Million | Info Edge, Vy Capital |
| September 2015 | Series G | $60 Million | Temasek Holdings, Vy Capital |
| April 2017 | Series H | $20 Million | Sequoia Capital India |
| February 2018 | Series I | $200 Million | Ant Financial |
| October 2018 | Series J | $210 Million | Ant Financial |
| February 2019 | Series J | $35 Million | Glade Brook Capital Partners |
| March 2019 | Corporate Round | $55 Million | Delivery Hero |
| January 2020 | Corporate Round | $150 Million | Ant Financial |
| April 2020 | Series J | $5 Million | Baillie Gifford |
| September 2020 | Series J | $166 Million | Tiger Global |
| October 2020 | Series J | $52M | Kora |
| November 2020 | Series J | - | - |
| December 2020 | Series J | $660 Million | Kora, Tiger Global Management |
| February 2021 | Venture Round | $250 Million | Kora, Tiger Global, Fidelity |
Zomato - Acquisitions
In 12 years of its existence, Zomato has acquired close to 14 companies. Their most recent acquisition was Uber Eats - India on Jan 21, 2020. They acquired Uber Eats - India for $206M.
Zomato has declared that it would be acquiring around 9.3% stakes in Grofers as per the latest filing with the Competition Commission of India. Though this stake is a minor one, the company is looking to acquire Grofers in the long run, added some sources on request of anonymity.
Through its tweet dated August 13, 2021, the Competition Commission of India (CCI) has sanctioned the Zomato-Grofers deal where the former company will be acquiring 9.3% stakes in Grofers.
| Acquired | Date | Price |
|---|---|---|
| MenuMania | July 2014 | - |
| Obedovat | August 2014 | - |
| Lunchtime | August 2014 | - |
| gastronauci.pl | September 2014 | - |
| Cibando | December 2014 | - |
| Urbanspoon | January 2015 | $55 Million |
| Mekanist | January 2015 | - |
| MapleGraph Solutions Private Limited | April 2015 | - |
| Nextable | April 2015 | - |
| Sparse Labs | September 2016 | - |
| Runnr | September 2017 | - |
| Tonguestun Food Network Pvt Limited | September 2018 | $18 Million |
| TechEagle | December 2018 | - |
| Uber Eats India | January 2020 | $350 Million |
Rishabh Rathi
Zomato - Growth and Revenue
Here's a look at Zomato's growth highlights:
- By 2011, Zomato had successfully established a monopoly in Delhi NCR and had moved to other Indian cities like Pune, Bangalore, Chennai, Hyderabad, and Ahmedabad.
- Zomato also kept up with the smartphone boom and timely launched its mobile application. This greatly contributed to its growth.
- By 2012, Zomato had begun its overseas operations, full-fledged in countries like UAE, Sri Lanka, Qatar, United Kingdom, Philippines, and South Africa.
- In 2013, it added Turkey, Brazil, and New Zealand to its ever-growing list of expansions.
- In 2017, Zomato claimed that it was operating profitably in all 24 countries along with rolling out a zero-commission model. The company claimed that its revenue grew by 81% in this particular year.
- In the same year, the online ordering services of the company crossed the mega milestone of 3 million orders per month.
- If we look at the numbers, Zomato has recorded a 225% rise in revenue in the first half of Financial Year 2020.
- Zomato delivered its 1 billionth order in July 2021.
- Zomato launched Zomato Wings, a platform that is designed to connect investors with the restaurants. “We hope to build the go-to platform for venture capital firms, angel investors, family offices, etc. that are looking to make private investments in restaurants and cloud-kitchens,” Zomato CEO Deepinder Goyal mentioned in a blog. However, Goyal has already made it clear that Zomato would only be a facilitator of fundraising for the restaurants and will not be investing in any of its partner restaurants.
Revenue
Zomato's FY20 revenue is Rs. 2,486 Crores. Its revenue was Rs. 1312.6 Crores in FY19.
Zomato's Revenue Breakdown is as follows:
| Revenue Breakdown | FY 20 | FY19 |
|---|---|---|
| Revenue from services to merchants (Ads, Subscriptions, transaction processing fee) | Rs. 2290.8 Cr | Rs. 1281.4 Cr |
| Sale of goods | Rs. 206.3 Cr | Rs. 16.3 Cr |
| Income from platform & delivery fees | Rs.107.6 Cr | Rs. 14.9 Cr |
Zomato has filed its quarterly earnings report for the first time ever after it has gone public in July 2021. According to the report, Zomato has adjusted gross revenue of Rs 1,160 crore, which consists of Rs 844 crore of revenue from operations and Rs 316 crore worth of customer delivery charges.
Zomato - ESOPs
Zomato will be listed in the Indian stock market on July 23, 2021, as per reports. The company allotted its shares on Thursday, July 22, 2021, where Zomato co-founder, Deepinder Goyal, has got the highest ESOPs worth Rs 2,800 crores, along with owning over 5% in Zomato separately.
The next was the founder of the non-profit Feeding India, Ankit Kawatra, who stood with ESOPs worth Rs 628 crores. Mohit Gupta, Gaurav Gupta, and Gunjan Patidar were the others to follow with 208, 202, and 156 crores respectively.
Zomato - FAQs
What is Zomato's Tagline?
Zomato's tagline is "Never have a bad meal".
Who are the Founders/Owners of Zomato?
The founders of Zomato are Deepinder Goyal and Pankaj Chaddah
When was Zomato founded?
Zomato was founded in 2008 by Deepinder Goyal and Pankaj Chaddah at Gurugram, India.
How does Zomato make Money?
The main source of revenue is the advertisements channel that the portal offers to display. This accounts for most of its revenue followed by the commissions that it charges to the restaurants. It works on a Commission Business Model.
Is Zomato Indian Company?
Yes. Zomato is headquartered in Gurugram, India.
Author: Rishabh Rathi
Source : https://startuptalky.com/zomato-success-story/
Date : 2021-12-03T07:48:00.000Z