One of the most talking about guys in the Business World, yet a media shy – Deepinder Goyal is the proud founder of Zomato.com!
Zomato.com as we all already know is an aggregation of Restaurant & other food-related destinations. The portal is the collective prodigy of the two old-time friends, Deepinder Goyal & Pankaj Chaddah. And with a strong & sole presence in over 10,000 cities across 22 countries, it is not only the largest of such medium in Asia but is also one of the largest in the world.
Strictly tight-lipped, there is barely anything to say about his personal life, apart from recently his wife delivered a cute baby girl named Siara. Nevertheless, what we do know is that, he comes from a humble and middle class family and was born and raised in Punjab.
Other than that, it is said about the IIT Delhi Graduate that he is a die-hard lover of food and that you can take food away from a Punjabi but you cannot take a Punjabi away from food.
The Fascinating Tale Of Zomato!
This is the story of a small gesture done for friends by these Super Hero’s, “Deepinder Goyal & Pankaj Chaddah – co-founders of Zomato.com” which gave birth to a new era of success of two unknown boys who began their journey with an unnoticeable viewer base of a few friends and colleagues and a list of 1,200 restaurants around Delhi NCR in their kitty that managed to go on to make a presence in over 10,000 cities across 22 countries.
Now in the early days, ordering food was an hour-long process of choosing the menus of the zillion restaurants you hold, Shortlisting the restaurant of preference, then going through the options of dishes that are available and finally order, right?
Coincidentally these were also the times, when we had to get out of our houses in search for the perfect eatery, with a hope to find good food. Nevertheless, with the changing times; we now have a directory similar to a telephone directory, but only to be far more advanced than it, called “Zomato.com”.
‘Zomato’ is a ‘one stop solution’ to all your cravings for food, alcohol, pubs, etc., or in other words, an online temple where you end up going every now-n-then but for one major selfish reason called “food”. In other words, is an online restaurant discovery guide providing information on home delivery, dining-out, cafés and nightlife!
But Zomato was not always hyped, famous or for that matter Zomato itself! It was initially called “Foodiebay.com”.
Now it is often seen that, the early life of Deepinder is not much that has been spoken of, mainly because it often gets overshadowed by his present success. But quite frankly, there’s really not much to talk about as well too.
Anyways, let’s show you how that happened!
So Deepinder had completed his graduation from IIT-Delhi (Indian Institute of Technology) in 2005. And after a short search, he took up the job at Bain and Company as a Senior Associate Consultant in January 2006.
Over the next almost 4 years at Bain, not only did he do a lot of consulting for the company but more importantly he founded Foodiebay.com, which later went on to become what we now call it – Zomato.com.
So the idea behind Zomato (then, Foodiebay) was conceptualised while they were working at Bain & Company, in its cafeteria. They had noticed that, a lot of people used to literally line up to check out menus, to order food during the lunch hour. Obviously, this used to take up a large amount of everyone’s time on a daily basis.
That is when Deepinder partnered with his old time friend who also happened to be working there Pankaj Chaddah, to create a website and, scan all the restaurant menus that were around the area, and upload it on an intranet website for Bain employees.
It was as good as a word document put up on the internet to simplify the restaurant or menu search for friends and colleagues.
To their surprise; the website began to get a lot of traffic, far more than their imagination.
That is when Deepinder saw the potential of a successful business in front of them, and hence, capitalising on the rising opportunity, they together formed Foodiebay.com 2008.
Now for them, a new era had begun after the launch of Foodiebay.com and going by the initial reason to begin, neither of them had the slightest of idea, what this would turn out to become.
And in no time, with the sudden growth in popularity within the State, they were forced to add-in more restaurants to the list by the end of the year, and even went on to expand to cities like Kolkata and Mumbai followed by Bangalore and Pune in 2009 & 2010, respectively.
Now we all know that nothing worth having comes easy, and similar was the case of foodiebay.com as well.
Soon, Deepinder also roped in another IIT’ian Gunjan Patidar they were friends with, to help them with their venture.
Deepinder used to work 24×7 from home and used to struggle very hard between his day job and this, to justify his time to both. To add to that, because the idea was unique and they were unknown to the masses, they also found it immensely difficult to get details of restaurants or other eateries as well.
But somehow for the first two years, they managed to run the website without any investment or professional team. But later, the need for a decent amount of funds along with expertise started to become of extreme importance.
That is when luck played its role and sent an angel for them. They managed to get in touch with Info Edge (India), the parent company of Naukri.com group, in August 2011, who made the first-ever investment in the company valued at USD $1 million.
This gave a huge boost to the morale and confidence of our Super Hero’s and in November they changed the name from Foodiebay.com to Zomato.com, keeping in mind their future plans to move outside the food genre and also to avoid possible conflict with eBay as their name had “eBay” in it as well.
That is when Deepinder along with Pankaj decided to quit their jobs at Bain and Company and divert their complete focus towards Zomato. This was a huge shocker to Deepinder’s parents, and often nagged him about it, till Zomato didn’t become a success.
Anyway, now with the demand from everywhere increasing, it was time for Zomato to grow and expand their reach and resources. That is when the company thought of bringing in a revenue model in place and monetizing on the growing conditions. This was also an attempt to reduce the reliance on external funds.
Some of the revenue models that were initiated soon after, included: –
- Restaurant advertising: This stream accounts for approximately 75% of the revenue wherein they place ads of customer restaurants.
- Event advertising: In this stream they earn revenue promoting events on Zomato for restaurants based advertisers accounting for 5% of the revenue.
- Event ticket sales: Here they take commissions on tickets sold through Zomato which accounts for 15% of Zomato’s revenue.
- Consulting services: Restaurant chains ask for advice on where to open their next outlet/branch. They research the same and charge consulting fees for providing that info.
Later, the company also launched mobile applications for iOS, Android, Windows Phone and BlackBerry devices, which was followed by an expansion to cities like Chennai, Hyderabad and Ahmedabad.
In the next some time, Zomato also launched a print version of the content of the website in collaboration with Citibank, named “Citibank Zomato Restaurant Guide” and followed by that made their biggest move since, initiation; Zomato began a wide-spread expansion overseas!
In 2012, Zomato expanded to countries including Dubai, UAE, Sri Lanka, Qatar, United Kingdom, the Philippines, and South Africa and later, also moved further to Auckland, Wellington and Hamilton in New Zealand as well, in the year 2013.
In FY2011-12, Zomato Media Pvt. Ltd. – the actual owner of the website reported revenues worth Rs 2.04 crores followed by Rs. 11.38 crores in the FY2012-13.
But at the same time, the fund raiser gave rise to the expansion of the company in Chile and most parts of Europe as well in the year 2014.
Yes, it is true that, the company did report losses in the initial phases of their growth, but almost all the companies in their initial stages go through heavy losses. That is because they are at a stage where they are more concerned about generating strong, loyal and reliable customer base. And given the current Investor mind-set, for companies like Zomato are more inclined on strengthening the base of the company and making sure the company’s reach is not limited to any boundaries. For them scalability is more important.
Moving on, in March 2012 Zomato reported around 2.5 million visitors on its website, which massively increased to approximately 62.5 million in 2014, and have also managed to book revenues worth Rs. 30.06 crores, which further rose to INR 96.7 crore in FY2015.
Other than that, Zomato.com which has now become Asia’s largest restaurant guide holds a list of over 1.4 million restaurants across 22 countries.
More recently, Zomato has also started with Users Choice Awards for the Restaurants that are listed on the platform.
With an employee base of over 2000 people, the company has also expanded to various other verticals and also offers services like — Cashless Payments, Online Ordering, Table
Reservations and Zomato Base and a Point-of-Sale system, and is now positioning and preparing to expand into the food ordering genre.
Talking about their funding; the company has raised a total of $163.8 Million so far, from investors including – Info Edge, Vy Capital and Sequoia Capital. Info Edge (India) Ltd. currently holds a 50.1% shareholding, while Sequoia holds 17.2% stake in the company.
Mergers & Acquisitions
- Urbanspoon: – Urbanspoon was a restaurant information and recommendation platform that was acquired recently in 2015 for $55M.
- Cibando: – Cibando is an iPhone application that enables users to find restaurants in Rome, Milan, Florence and other cities in Italy, was acquired in 2014.
- Gastronauci.pl: – Gastronauci.pl is a platform for Restaurant reviews, news, contests, etc and was acquired in 2014.
- Lunchtime: – Lunchtime is an online food guide that was acquired in 2014.
- Obedovat: – Obedovat again an online food guide for Slovakia was acquired in 2014 itself.
- MenuMania: – New Zealand based, MenuMania is a restaurant listing and review portal that was acquired in 2014 too.