Is Zomato Acquiring Bootstrapped Startups In India?

A couple of years back, Zomato was floundering as a restaurant search, discovery, reviews, and ratings service. However, with the help of several acquisitions, it diversified into the food delivery sector and has now bounced back into the Billion Dollar Unicorn Club.

Zomato’s Offerings

Gurgaon, India-based Zomato was founded in 2008 by IIT graduates Deepinder Goyal and Pankaj Chaddah as an online restaurant search and discovery service. Today, Zomato has five major streams of business: Advertise, Order, Book, Trace, and HyperPure. Advertise leverages its review database with 1.4 million restaurant listings in 23 countries and 90 million monthly visits. Order, and Trace, and Book are online tools for managing takeout orders, delivery operations, and table reservations, respectively. HyperPure is a farm-to-fork supplies platform for restaurants for high-quality ingredients.

Over the past few years, Zomato has also introduced a rewards program called Zomato Piggybank and a dine-in subscription platform called Zomato Gold. Last month, it announced that it is foraying into the experiential events segment with the launch of Zomaland, a food and entertainment carnival to be held across Delhi, Pune, and Bengaluru.

Zomato’s Financials

Zomato ended FY18 with revenue of INR 466 crore ($66 million), up 44% from INR 323 crore ($46 million) in FY17.  It has reduced its losses by almost 73% to INR 106 crore ($15 million) in FY18 from INR 390 crore ($55 million) in FY17.

Online ordering accounted for about 65% of its overall revenue in FY18, up from 35% in FY17. It now has 74,000 delivery executives, compared to just 5,000 a year ago. Zomato Gold has 7,00,000 members and over 6,000 restaurant partners and Piggybank has 1.5 million subscribers.

So far, Zomato is venture funded with $653.8 million from investors including Temasek Holdings, Info Edge, Sequoia Capital, Vy Capital, Neeraj Arora, Alipay Singapore, and Ant Financial. Its last round of funding was held in October 2018 when it raised $210 million at a valuation of $2 billion. Earlier in the year, it had raised $150 million at a valuation of $1.1 billion. Back in April 2015, Zomato had raised $50 million at a valuation of over $1 billion, but in early 2016, its valuation was slashed to $500 million.

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Disclaimer: More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion ...

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