15 Jul 2021

The Zomato Story: From Featuring Scanned Restaurant Menu Cards To IPO

July 14, 2021 will always remain special in the history of India's startup ecosystem. Zomato opened for subscription with INR 9,375-crore initial public offering (IPO) in March 2020.

The online food delivery platform is spearheading a listing spree from the likes of Delhivery, Paytm, and Nykaa which are slated to hit the markets soon. There has also been criticism for the Zomato IPO being overpriced. Most startup enthusiasts came out on social media with accolades for the food delivery Unicorn.

Zomato’s success story, backed by an asset-light scalable model and a first-mover advantage in food delivery and accelerated by Covid-19, is today a case study for many startup founders and investors. From starting out as an online discovery platform that featured scanned restaurant menu cards to attaining the coveted Unicorn status and becoming India’s first-ever foodtech brand to go public, Zomato has come a long way.

Here is a sneak peek into Zomato’s 12 plus-year-old journey:

2008: Deepinder Goyal co-founded a restaurant discovery platform called Foodiebay with his IIT-Delhi batchmate Pankaj Chaddah. The duo picked up menu cards from different restaurants in Delhi, scanned them, and put them online on a website. "It had blue HTML links; there was no search, but you could use a browser search bar to look for a restaurant. And as soon as you clicked on one, you used to get its phone number on top, and a bunch of menu cards,” Goyal recalled in an earlier interview with Entrepreneur India.

2009: By now, many restaurants had approached them to advertise on the site. The founders made enough revenue to pay their rentals and include restaurants from other cities.

2010: Foodiebay was infused with its first round of funding from Info Edge, a publicly listed holding company with a portfolio of companies such as Naukri.com and 99acres.com, among others. Info Edge gave the startup a seed round of $1 million. The company was rebranded as Zomato to avoid any potential trademark issues with another Internet company.

2011: The startup got another round of funding of $3 million from Info Edge.

2012: This was a crucial year for the startup, not only because it received its third round of funding of $2.3 million from Info Edge, but also this is when it expanded to other countries, starting with the UAE and then to Sri Lanka, South Africa, Qatar, the Philippines, and the UK.

2013: It made inroads into Turkey, Brazil, New Zealand, Portugal, and many more markets and also raised a $10 million round from Info Edge, followed by a $37 million round by Info Edge and Sequoia Capital.

2014: This is the year the food delivery platform started its acquisition spree, starting with the acquisition of MenuMania in New Zealand, followed by Lunchtime in the Czech Republic, Obedovať in Slovakia, Gastronauci in Poland, and Cibando in Italy. Later in the year, it received a sixth round of funding of $60 million from Vy Capital alongside Info Edge and Sequoia Capital.

2015: This year Zomato made headlines for acquiring Urbanspoon, a leading startup in the restaurant discovery space in the US. Additionally, Mekanist, NexTable, and Maple POS also became a part of Zomato. Infusion of capital also continued with Info Edge leading the seventh round of $50 million, and Temasek a $60 million round with existing investor Vy Capital. Simultaneously, the company also started working towards reducing the burn rate and layoffs were a huge part of it.

2016: This is the year the company faced some setbacks. HSBC came out with a report that cut the Unicorn startup’s $1 billion valuations to $50 million. This led to Zomato closing its operations in various countries such as the US, the UK, Brazil, Chile, Sri Lanka, Canada, Italy, Slovakia, and Ireland.

2017: The company had another setback because of a cyber attack. The records of 17 million users were breached from the database of the company.

2018: This was a fairly good year for the company. It acquired Bengaluru-based TongueStun Food for $18 million in a cash and stock deal and a Lucknow-based startup TechEagle Innovations to foster drone-based food delivery in India. It also raised $210 million from Alibaba’s Ant Financial that received an ownership stake of more than 10 per cent in the company as part of the round. This valued Zomato at around $2 billion.

2019: This year Zomato had another hitch when restaurants listed on the platform called the company out through the #logout campaign for eating their profit margins through its features like Infinity Dining and Zomato Gold that provided heavy discounts to customers. However, despite this hurdle, Zomato registered a rise of 177 per cent in its restaurant partners and got 73,000 more restaurants on board.

2020: Fuelled by pandemic, Zomato witnessed a rise of 225 per cent in its revenue in the very first half of FY2020. It registered $205 million in revenue as compared to $63 million (in the first half) of last year, the company’s biannual report said. The company also raised $660 million in the Series J funding round led by Kora, Tiger Global Management, which brought Zomato's Valuation to $3.9 billion.

2021: The year has been remarkable so far, starting with a fundraise of $500 million from existing investors along with Ant Group and Sunlight Fund, hitting a valuation of $5.4 billion in February, raising $250 million funding from Kora, Fidelity, Tiger Global Management and finally the IPO. It is also in the final stages of acquiring around a 9.3 per cent stake in e-grocer Grofers.

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