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.

Swiggy, its rival in the food delivery business, recorded revenue of INR 442 crore ($63 million) and losses of INR 397 crore ($56 million) in FY18. Swiggy has raised $1.5 billion in venture funding so far. In February this year, it raised $100 million at a valuation of $700 million. In February 2018, it raised $100 million at a valuation of $700 million. Then in June, it raised $210 million at a valuation of $1.3 billion. Last month, Swiggy raised $1 billion in funding at a valuation of $3.3 billion.

To counter Swiggy’s huge cash infusion, Zomato is reportedly in talks with existing and new investors to raise $0.5- $1 billion in funding.

Zomato’s Acquisitions

Since our last coverage, Zomato has made three acquisitions. In 2017, it acquired Bengaluru-based delivery startup Runnr for an estimated $20 million. Founded in 2015, Runnr, formerly RoadRunnr, had raised $28 million. It had acquired TinyOwl in 2016. TinyOwl was founded in 2015 and had raised $27.7 million.

In 2018, Zomato acquired Bengaluru-based food e-marketplace TongueStun Food for about $18 million. It caters to 1500+ companies including a number of large organizations like IBM, Accenture, E&Y, Sony, Genpact, 3M, Mindtree and Deloitte. Founded in 2012, TongueStun had raised $5 million in funding.

Last month, Zomato acquired drone startup Lucknow-based TechEagle Innovations for an undisclosed sum. Founded in 2015 by Vikram Singh Meena, TechEagle had received an undisclosed amount of funding from the UP government. TechEagle will help Zomato create a hub-to-hub delivery network powered by hybrid multi-rotor drones. Zomato currently delivers 21 million monthly orders and has a last mile delivery fleet of 150,000 partners.

Over the past 10 years, Zomato has acquired 13 startups. Of these, Poland-based Gastronauci (2014), Auckland-based MenuMania (2014), Czech Republic-based Lunchtime (2014), Slovakia-based Obedovat (2014), Delhi-based MapleGraph Solutions (2015), Seattle-based Urbanspoon (2015), and Gurgaon-based Sparse Labs (2016) were all bootstrapped. Seven out of 13 acquisitions were bootstrapped. That’s over a 50% preference for bootstrapped startups.

As I say in my recent article Bootstrapping to an Exit, a small, capital-efficient startup that has shown product-market fit in a domain with strategic alignment is far more interesting as an acquisition target.

What other bootstrapped and capital-efficient startups are out there that Zomato could look at acquiring?