Delivering on early promise: Charting Zomato’s rise to fame
Zomato, India’s pioneering foodtech unicorn, has seen numerous highs and lows along the way. Zomato’s chances of survival were bleak with the significant layoffs and losses of 2015. To minimise costs in its weaker business elements and transfer the attention to more revenue-generating areas, the company laid off around 300 employees or about 10% of its overall employment.
Zomato, which was started in 2008, is India’s first food-tech unicorn. The business has had its ups and downs, including a high-profile fire sale last year that forced the company’s founder to depart. Deepinder Goyal, the CEO, and Pankaj Chaddah, the co-founder, kept the company on track for expansion.
FoodieBay.com Makes Way For Zomato
Goyal and Chaddah Goyal, both IIT grads who created Foodiebay in 2008, developed Zomato. Zomato’s $1 billion valuations were boosted by a $200 million investment earlier this year. Sequoia Capital, Vy Capital, Temasek, and Ant Financial have all contributed to the company’s current valuation of over $1 billion.
Zomato Eats Around The World
Zomato’s quick expansion into nations other than India can also be linked to its quick growth. Zomato began expanding its services to Sri Lanka, the United Arab Emirates, Qatar, South Africa, the United Kingdom, and the Philippines in 2012. It bought Gastronauci, a restaurant search service in Poland, and Cibando, an Italian restaurant finder, in 2014.
Zomato, the company behind popular online travel booking site Zoo, announced a massive layoff in 2015. It was also in 2015 that Zomato acquired MapleOS, which would allow it to expand its directory, database, and operations.
A Decade of Experience
Despite the challenging weather, Goyal and Chaddah have done an outstanding job keeping Zomato’s mast up and sailing. The company is currently seeking further capital to grow its service offer and enter new markets. It is competing with Swiggy, which has also achieved unicorn status in a short amount of time.
Swiggy and Zomato have reported monthly cash burns of $10 million to $12 million. Users’ marketing and acquisition costs, such as discounts, coupons, and advertisements, are mostly to blame. At the same time, they’re branching out into innovative services like Zomato, which has dining-out capabilities. The firm isn’t getting rid of Zomato Gold; instead, it’s tweaking the conditions to favour restaurants a little more, and it’s doubling down on Gold for deliveries as well.
2019 And Beyond For Zomato
According to the company’s biannual report, revenue increased by 225% in the first half of FY2020. From March to September 2019, Zomato’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) loss decreased by 40%. The corporation also stated that its monthly burn rate has decreased by 60%.
After adding 73K eateries to its platform, Zomato claims to have seen a 177% growth in restaurant partners. In the first half of the fiscal year 2020, the food aggregation and delivery firm had roughly 119K establishments, up from 43K the previous year. Later this year, Zomato wants to offer a new service in India.
With 1.4 million members, the controversial Zomato Gold service has seen a 180% rise in usage. At a valuation of $3.3 billion, the Bengaluru-based food delivery unicorn is also in talks to raise $500 million in new capital headed by Naspers. With Amazon ready to debut its food delivery services in India, there’s a bigger player on the horizon, but Zomato has its eyes set on grabbing hold of the largest piece of this pie.