Founded: July, 2008
Headquarters: New Delhi
Founder: Deepinder Goyal, Pankaj Chaddah
CEO: Deepinder Goyal
Industry: Consumers Services
Food is the driving force for many and when we say that, we mean ‘n’ number of people, and you too will agree with us when we you keep a keen eye on the endless idioms and phrases. For example, when we talk about income we often quote ‘earn bread and butter’ and so on; moreover it comes first on the list with regard to our basic amenities.
Needless to say, but waiting for food is something which every foodie hates. When they are hungry they need it RIGHT AWAY or they turn into nothing but ‘hangry’ (Yes, that’s hungry + angry). While some get frustrated waiting in queue to order food, others just can’t help but keep calm till their turn comes. However, there are another lot of people who will find a solution to this eternal crisis and create a platform to do away with hurdles to a happy meal. Deepinder Goyal, Pankaj Chaddah are such names who have been successful in doing that, and at the same time helping food lovers around the world reach out to their one and only solace — food! If you did not guess it right till now, then let’s unfold the mystery. We are talking about the food search engine ‘Zomato’, and we won’t be wrong if we say this is the ‘Google’ of food.
The thought to build up a brand like Zomato was sowed in the food hub of the management consultancy Bain & Co’s New Delhi office. Deepinder Goyal was working as Senior Associate Consultant and Pankaj Chaddah was working as Senior Analyst at Bain. They are both graduates from the Indian Institute of Technology, Delhi, and while working for Bain, they saw people wait for long hours in the food court to get a glance of the menu card. Therefore, one day they thought of finding a solution to this and the idea thought germinated in the form of ‘Foodiebay’. They scanned copies of the menu and uploaded it on the company’s private network. Soon the employees started using the facility, thus saving their time and in turn bringing traffic to the website.
How Did It All Started…
Soon, this intranet based website was made public and the menu was no longer confined to the cafeteria but extended far and wide. The first restaurant menu they uploaded on their portal was those belonging to Haus Khas, Delhi. From the time of its inception the headquarter remains to be in New Delhi, India.
The Birth Of Zomato
After Delhi, they casted their radar over major cities like Kolkata and Mumbai. Their services were used by thousands of users and the number has multiplied ever since. Foodiebay was getting enough recognition as the services it was providing was unique, prompting the founders to taking this project to an international level. It was then that they chose to revamp the name in order to make it more captivating, easy to remember and also avoiding any confusion with the popular website eBay. Therefore, in November 2010, Foodiebay came to be known as Zomato, a name that fits the bill perfectly.
Ideas Which Brought Funds
With the extensive utility of this platform to locate restaurants and scroll through the menu cards, the builders of Zomato thought that they should make it easier for people to access. They then ushered in the thought of building a mobile application for this website so that people can benefit from it on-the-go. But with the broadening of this idea, the need for finance was felt and as usual if you have an idea which is unique, funds flow in.
Zomato interested the founder of renowned job search portal Naukri.com Sanjeev Bikhchandani and he plied to invest in the project. Thus, in 2010, he provided seed funding of US$ 1 million through his company Info Edge (India). The following year, in the second round of fund raising, the same financiers provided them with a fund of US$ 3.5 million. Another round of funds worth US$ 2.5 million was invested in the project in 2012. Next year, a whooping US$10 million funding flowed in from Info Edge making it a holder of more than 50% stakes in the startup. Other investors of this enterprise include Sequoia Capital, Vy Capital and Temasek.
A joint funding by these firms was made in 2013, summing up to US$37 million, followed by another round of funds amounting to US$60 million.
Founders Deepinder Goyal and Pankaj Chaddah are leaving no stones unturned and this is the reason behind the company’s startling growth. They believe that hiring the right people is a pre-requisite for the success of a company and this is also the biggest challenge faced by them while creating Zomato. Despite, they have done this job in the best possible way and they now have a team with each member being significant in bricking this tower.
In the beginning they did not concentrate on making money but as the website geared up, they saw business prospects in it. They then modeled it in a way that their hardwork pays off in the form of monetary benefit.
With 62.5 million registered users, Zomato is a platform where one can get in touch with foodies around the world. Taking advantage of this, big restaurants place their advertisements on this website and in turn Zomato earns revenue. Another way in which this portal generates revenue is by the sale of tickets to food festivals and culinary events.
They also have clients who seek their advice in making their business better, which is also a part of their business model.
With the launch of its cashless transaction, they have made it easy for customers to pay their bills without carrying cash, and in turn they benefit from the commissions they are entitled to. The implementation of new ideas is one of the many things which have paved the path to success for them.
The most important task the company had is to figure out how to cover all the streets in all the major cities so that the people who rely on them do not miss out on the best eateries in town. This hurdle was there when Zomato was in its early stages and it persists to be a challenge but the founders along with the team members are petting in all their efforts to make it better. When they launched their website in Dubai, the co-founder Pankaj Chaddah himself went out in the scorching heat of the summer to take up details of the restaurants.
When thinking of ordering food the first question that comes to our mind is ‘what to eat’, and after a brainstorming session, once we decide that, the next BIG question is ‘where to eat’. These questions take up a substantial amount of our time, making us hungrier at the end of it all. However, from the time Zomato paid us a visit, the aforesaid questions hardly bother us any longer. This portal has made finding the best eateries in our locality an easy and fairly interesting affair.
Change is constant and that is what defines their vision. Their business is ever evolving and as he said in his Reddit profile, “The vision changes every day. Part of our culture is “1% done” – this means that wherever we are, there is always so much more to do.”
Net Worth Of The Founders & The Company
With the growth of Zomato, the company has reached the second place in the list of top Indian startups as of 2016. With the fourth round of funding the net worth of this company reached US$660 million as quoted by the CEO. Although there is not much information about the net worth of the founders, speculations say that soon their combined net worth will be a billion.
When asked about his net worth, this is what Mr. Goyal had to say, “I didn’t bother to check.”
Mergers & Acquisitions:
Beginning their journey in 2008, Zomato’s first acquisition was Menu-mania, a New Zealand based company, and then they went on to take over Lunchtime.cz and Obedovat.sk. The same year, they had Polish enterprise Gastronauci under its belt. Extending their international roots, they bought the website Urbanspoon, and with this they set foot in the United States, Australia and Canada. In January, 2015, they also took control of Turkish firm Mekanist. This was followed by acquiring Delhi’s MapleGraph and henceforth, the product MaplePOS was called ‘Zomato Base’. Then they bought the US based portal NexTable.
Threats They Faced!!
With its acquisition of Urbanspoon, this Indian venture posed competition to big names in the business like Yelp, OpenTable and Zagat. To make a place the market and cement their position in it, this new enterprise will have to work day in and day out, in order to give people a reason why they should switch their preference from these known and preferred names to Zomato.
When it first began, they followed the full-stack marketing but in 2015, they shifted to the enterprise market which made them layoff hundreds of employees.
Online portals are vulnerable and any bug can help hackers dig into all the confidential information of a person and Zomato is no exception. In June 2015, to show how users’ personal information lying in the Zomato database is prone to leakage, hacker Anand Prakash hacked the website. Having worked with the Cyber Crime branch Gurgaon, he wrote in his blog, “While creating an account, a user can store his phone number, addresses, date of birth, link Instagram account etc. In one of the API call, they were reflecting the user data based on the “browser_id” parameter in the API request. Interestingly, changing the “browser_id” sequentially resulted in data leakage of other Zomato users. The data leaked also had Instagram access token which could be used to see private photos on Instagram of respective Zomato users.” This issue was soon fixed by the Zomato team.