On lazy days when we aren’t in the mood to cook and don’t want to go out either, Zomato is one the first things that comes to our mind, to rescue us in situations like these. Zomato is an Indian food delivery aggregator app, other than delivery food from various partnered restaurants under one roof, it also provides concrete information regarding the restaurant, that includes the menu, reviews, pricing and more.
The founders Deepinder Goyal and Pankaj Chaddah launched Foodiebay, a food directory website in 2008, and later rebranded it as Zomato in 2010. And since then the growth of Zomato has been phenomenal despite of having few ups and downs. The company is one of India’s first food-tech unicorn.
Origin of Zomato
The founders of Zomato, Deepinder Goyal and Pankaj Chaddah who are both IIT Delhi graduates worked as analysts at Bain and Company, Delhi. One day at their office they realised that there were a lot people who were waiting for a long time just to get a flash of the menu card at a nearby café. And at that moment, they came up with a solution to put an end to such inconveniences. And thus, Foodiebay was launched.
Foodiebay gained tremendous user base and growth rate, and within nine months of its launch, it became the largest restaurant directory in Delhi NCR. It initially started out in Delhi and eventually extended their services to Mumbai and Kolkata, and now all across India. After having two successful years, the founders decided to go international. After being backed by investors and little modification, Foodiebay was rebranded to be called Zomato in 2010.
In 2012, Zomato started its international with its UAE launch and eventually launching its services in Europe and South Asia. In 2015, it launched Zomato Gold, which is a membership program in which consumers can avail exclusive deal at Gold-tagged restaurants.
Struggles of Zomato
Zomato had a good start to the business till 2014, as it had a fully functional international service, however things took a turn since 2015, and it went through a ‘make or break’ point. In 2015, Zomato laid off 300 employees to curb losses. In the same year, Zomato acquired Urbanspoon in the USA, and rebranded it as their own company, but things did not go as expected and the venture failed miserably.
In 2016, Zomato had to cut out its services in several countries like the US, UK, Chile, Canada, Brazil, Sri Lanka. Ireland, Italy and more. And when they resumed, Zomato had to resort to remote services. In 2017, Zomato faced its biggest blow as it encountered a cyberattack with a hacker that had breached into 17 million users record from the company database. However, the issue was soon resolved, as the hacker just wanted to prove that there were loopholes in the security system.
In 2019, the #logout campaigned surfaced when the partnered restaurants called out Zomato for consuming their profit margins through, Zomato Gold and Infinity dining service. The restaurants also highlighted unreasonably high commissions and arbitrarily applied additional charges. Post this campaigned Zomato altered Zomato Gold rules and discontinued Infinity dining features. In the following years, Zomato has been involved in a number of other controversies, which have been resolved soon.
Despite having such controversies, Zomato claims to have registered a rise of 177% of restaurant partners and got on board an additional 73,000 restaurants. Zomato has over 1.4 million listed restaurants and 12,000 restaurant partners aligned with its app, as of August 2021.
Zomato has raised more than $2.1 Billion in funding, and continues to do so. In the 12 years of its journey, Zomato acquired around 14 companies, and one of their biggest acquisition was Uber Eats- India for $206 Million in January 2021.
Despite having tough competitors like Swiggy, Foodpanda, it still managed to generate a revenue of $1 billion in the financial year 2021. And offered Rs 9,375 crore as initial IPO, which opened for subscription during July 14-15 July 2021, and received a strong reception from investors. The public issue was subscribed 38 times, which is the highest in the last 13 years among IPOs valued at more than Rs 5,000 crore.
Zomato also has a strong social media presences, which helps in connecting with urban youth. It produces content that are trendy and relevant to the target demographic.
Zomato changed the Indian food delivery system and it continues to mould it further. Zomato’s tagline ‘Never have a bad meal’, truly lives up to it. Zomato shows that despite of having ups and downs, they stood strong and sailed through it, and continue to improve themselves by adding new and relevant features.