Eating out of their hands

It was early 2008. Deepinder Goyal and his office friends at consulting firm Bain & Co were tired of scouring through stacks of menu cards each time they wanted to order food from a nearby restaurant. That’s when Goyal, a maths and computing graduate from IIT-Delhi, thought of scanning the menus of restaurants located near his Gurgaon office and sharing them on the company intranet. Anyone in the office could now log in, check out the offerings and prices at the various eateries and place an order. The initiative was an instant hit among his colleagues and Goyal was enthused to keep adding more menus to the list.

It was just a matter of months before he realised that an online restaurant guide was a viable business with serious potential. He teamed up with friends and fellow IIT-ians Pankaj Chaddah and Gunjan Patidar, and spent weekends collecting and scanning the menus of eateries in the then emerging corporate hub of Gurgaon.

By July that year, having covered nearly 1,200 restaurants in the National Capital Region, Goyal knew he was ready to go public with his online food guide. Thus was born Foodiebay.com, now rechristened Zomato.com — a trusted reference — for those who want to know all about restaurants, from their location on Google Maps to menus, to prices and user reviews across 11 countries.

“The company understood that people wanted to know more about the offerings at a restaurant and possible experiences,” says Goyal, who is now on the road, in an effort to expand Zomato’s operations.

Stirring the pot

The initial investment — the cost of collecting and scanning menus, and paying Zomato’s first data collection executive, Ashok Kumar — came from Goyal’s savings. After starting Foodiebay.com, he continued working with Bain until November 2009.

By 2010, Foodiebay had made inroads into restaurants in not only the national capital region (NCR), but also Mumbai, Pune, Bangalore and Kolkata. Its rising popularity attracted the attention of Info Edge, the company that owns Naukri.com , 99acres.com and other portals. By pumping in ₹4.7 crore in August 2010, Info Edge enabled the website to recruit sales staff. The name was also changed to Zomato to avert any likely associations with Ebay.

“Info Edge was interested in our business model. There weren’t many players in the online search market then and they believed in our execution strength,” says Saurabh Sengupta, India country manager at Zomato.

The latest round of funding in November last year saw Info Edge as well as Sequoia Capital pumping in ₹228 crore. Info Edge has so far invested ₹143 crore and owns a 50.1 per cent stake in the company.

While Zomato got over 16 million visits last month, its revenue comes mainly from restaurants advertising on it. Ad rates vary from city to city.

In financial year 2012-13, it clocked Rs 11.5 crore revenue. Zomato stepped into global markets only one-and-a-half years ago.

The company incurs its major costs on staff and technology requirements. It employs 650 people in 11 countries, including Brazil, Indonesia, New Zealand, South Africa, Sri Lanka, the UAE and the UK. It is eyeing newer geographies as it reaches a saturation point in the Indian market despite updating restaurant menus every three months.

“Our success in a country depends on the ability to find the right people to work with. We want to cover the whole of Asia and Eastern Europe,” Sengupta says.

After using up the money from the latest round of funding, the company won’t require more funds in the next financial year, he says.

With so much going for it, Zomato is the perfect acquisition target for internet biggies. But team Zomato doesn’t believe in giving it all up for money. “We have been approached for a sell-off. But we have not built the business to sell. We want to build a world-class company,” he says.

Now that’s a dream within tasting distance… for, as long as people love to eat out, they will readily click for it.

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