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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, which reversed the whole scenario and made it extremely simple for the consumers. Deepinder Goyal and Pankaj Chaddah founded Zomato in 2008 further aided this process of eating out and food delivery.
Zomato has hit 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 |
About Zomato and How it Works
Zomato - Founders & Team
Zomato - History | How was Zomato Started?
Zomato - Startup Launch
Zomato - Mission and Vision
Zomato - Name, Tagline, and Logo
Zomato - Business Model and Revenue Model
Zomato - Startup Challenges
Zomato - Competitors
Zomato - Funding & Investors
Zomato - Investments
Zomato - Acquisitions
Zomato - Growth and Revenue
Zomato - Awards and Achievements
Zomato - Partnerships
Zomato - Future Plans
Ashwini
About Zomato and How it Works
Zomato is an Indian food delivery startup restaurant aggregator. It 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.
Deepinder Goyal
Deepinder Goyal is an IIT Delhi alumnus. Goyal was not a good student back at school but he eventually made his way to the prestigious IIT. After completing his graduation, Goyal was hired by Bain and Company, where he served as a Senior Associate Consultant for a little less than 4 years, after which he founded Zomato.
Pankaj Chaddah
Pankaj Chaddah is a BTech, Mechanical Engineering graduate from IIT Delhi. Chaddah completed his graduation and then went to join Bain and Company, where he served for two and half years before joining Deepinder to found Zomato. However, this co-founder resigned from Zomato in May 2018, where he served as a "conscience keeper, and a support system during upheavals," as he had described his role, for over 10 years. Chaddah founded Shyft (formerly Mindhouse) in November 2019, where he currently serves as a Co-founder.
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 that is vital in bricking their dream project.
Shubham Kumar
Zomato - History | How was Zomato Started?
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 - Mission and Vision
Zomato states that their mission "is to ensure nobody has a bad meal."
Zomato co-founder Pankaj Chaddah had declared that the vision of Zomato "is to be the global platform when someone is looking for food locally."
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 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 Zomato delivery service or 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]
Vidhi Punamiya
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 its inception and continues to drive considerable efforts on the venture’s part.
But this is not it. From time to time, Zomato faced numerous serious 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 competition from other players including:
- DoorDash
- Uber Eats
- Grubhub Inc.
- Deliveroo
- Postmates
- ChowNow
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.
The $660 million round led by Kora and Tiger Global Management and the $250 mn round led by the same investors with Fidelity and some other investors joining them are two of the largest rounds that Zomato received in recent times. The Ant Financial led $210 mn funding round that came in October 2018 was the last major before these rounds. Alibaba and other Chinese investors have largely contributed to the growth of the foodtech startups in India, where both Zomato and its rival Swiggy have received funds from Chinese giants like Alipay, Ant Financials and more.
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% stakes.
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 - Investments
Zomato has invested in 10 companies to date. The most recent investments of the foodtech unicorn were reported to be in the adtech startup, Adonmo Pvt Ltd, and in UrbanPiper Technology, which is a B2B software platform, as of January 28, 2022. The Gurugram-based food delivery giant has invested $5M in UrbanPiper and $15M in Adonmo.
Zomato Co-founder and CEO Deepinder Goyal, who had first invested in Blinkit in 2015, has sold his stake to Tiger Global before it hits the public market ahead, as per the news dated February 3, 2022. The Gurugram-based food unicorn has again invested in Blinkit in June 2021.
Here is a list of the major investments done by Zomato:
| Date | Name of the Company | Funding Round |
|---|---|---|
| January 28, 2022 | Adonmo | Corporate Round |
| January 28, 2022 | UrbanPiper | Corporate Round |
| December 10, 2021 | Shiprocket | Series E |
| November 10, 2021 | Magicpin | Series D |
| November 10, 2021 | Shiprocket | Corporate Round |
| November 10, 2021 | Cure.fit | Series F |
| June 29, 2021 | blinkit | Series G |
| June 14, 2018 | Loyal Hospitality | Venture Round |
| September 25, 2017 | TinMen | Seed Round |
| September 2, 2015 | Grab | Seed Round |
Zomato - Acquisitions
In 12+ years of its existence, Zomato has acquired close to 14 companies. Its most recent acquisition was Uber Eats - India on Jan 21, 2020. Zomato 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.
Zomato is in talks to merge with Blinkit and amid these talks, the footech unicorn's board approved the acquisition of 16.66% stakes in the robotics startups, Mukunda Foods, for $5 Mn, as confirmed by the reports dated March 16, 2022. The acquisition of the 2012 founded food robotics company Mukunda will enable help Zomato to empower the restaurants to become more efficient with a lower cost of manpower, and would also reduce the wastage along with increasing the kitchen throughput.
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 |
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.
Rishabh Rathi
Zomato - Growth and Revenue
Zomato has grown far and wide ever since it brought in the disruptive idea of food delivery in the Indian ecosystem of startups. As part of its new growth initiative, the company is looking to come up with ultra-fast food deliveries for which Zomato is in talks with restaurant partners and cloud kitchens. As per this new initiative announced on March 18, 2022, Zomato will be launching a faster food delivery service that will deliver food within 10 minutes of ordering. Zomato has already tried this experiment briefly in Bengaluru in 2021 and might pilot this in some cities in the coming April 2022.
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.
- In an unprecedented order spike during the New Year's eve, food delivery giant Zomato recorded to deliver over 2.5 mn orders packing in 7100+ orders per minute. The Deepinder Goyal-led food delivery unicorn reported to deliver 4250 orders per minute during the same time in 2020.
OMG! 2 million orders! First time in a single day. Three more hours to go... https://t.co/ahODGjXWdF pic.twitter.com/2omWRQSRve
— Deepinder Goyal (@deepigoyal) December 31, 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.
- Zomato has shut down its South African operation after putting an end to its US and UK subsidiaries. With the closing of Zomato South Africa Proprietary (Pty) Ltd., the company aims to further its hold in India.
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 and delivery 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.
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.
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 - Awards and Achievements
Zomato won a range of prestigious awards throughout the years. The foodtech giant even bagged the top honors at the seventh edition of The Economic Times Startup Awards, including the Startup of the Year award in 2021.
Zomato - Partnerships
Being active since 2008, Zomato has also seen a lot of partnerships with a diverse range of national and international companies including restaurants, cafes, fintech companies, and more. To mention some of the prominent partnerships of Zomato are:
- Zomato has partnered with the government of India for a street food project on February 5, 2021
- Zomato joined hands with InCred to extend credit facilities to restaurant partners on December 21, 2020
- Zomato collaborated with RBL Bank on March 2, 2020, to launch "Edition Credit card" powered by Mastercard
- Zomato and BioD Energy had collaborated to reduce the wastage of cooking oil in the country on October 21, 2019
- The company partnered with Paytm to expand its food ordering business online in India on January 18, 2019
Zomato - Future Plans
Zomato is currently looking to focus on its Indian food delivery business as of now after closing most of its international businesses. Zomato is forecasted to grow at a CAGR of 40%.
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.
Source :- https://startuptalky.com/ Author :- Rishabh Rathi Date :-March 29, 2022 at 01:18PM