Let me take you to the early 2000s. How many times have you struggled to find the menus of restaurants around you during that time? Your choice of eating out was entirely dependent on word of mouth – you would have to head to the restaurant itself to know the menu, or you get the information from your friends. The worst-case scenario is the menu got changed by the time you made your decision and reached the restaurant.
Thanks to the internet, the food industry underwent a significant revolution, paving way for online ordering and food delivery of your favorite food items. Zomato, the Gurugram-based food tech unicorn, is focused on providing better food for more people through restaurants. In order to do this and make sure that restaurants are a great alternative to home cooking; they drive quality, accessibility, assortment and affordability. QAAA are the four parameters that Zomato aligns themselves to every day.
Zomato was co-founded by Deepinder Goyal and Pankaj Chaddah in 2008. The timeline of this startup story is pretty interesting. In 2005, Deepinder started the online food delivery startup foodlet.com, to tie up with restaurants and put up their promotions on the website. But it turned a failure due to operational difficulties. In 2008, when both the co-founders started out as Executives in Bain Consulting, they could not easily find menus of nearby restaurants, and had to ask friends for the menu or head to the restaurant directly. This sparked the idea to start Foodiebay, which offered customized food guides with personalized reviews and menus to help users make informed decisions before dining out. In 2010, the online food guide and restaurant directory rebranded itself as Zomato.
Since their inception, the startup has expanded significantly and today, they have a team of more than 5000 Zomans, that represents 32 nationalities, and helps 55 million users every day to decide where to eat through 1.4 million listed restaurants or deliver over 28 million food orders per month.
Zomato currently provides services to the entire food value chain, including:
- Restaurant Ratings & Reviews
- Restaurant Search & Discovery
- Online Order: Food Delivery
- Pick Up: Ordering Take away
- Table Reservations
- Hyperpure: Ingredients supply to restaurants
- Food@Work: Canteens
- Gold: Restaurant premium subscription services
Zomato launched “India needs Oxygen” through its Feeding India initiative during the second wave of COVID-19. The donations were utilized for purchasing and distributing oxygen cylinders. It has also set a goal of reaching 10% women participation in its delivery partners fleet by the end of 2021.
Zomato is now on an ambitious quest to move past being a food tech company and become a farm to table company. The company is currently experimenting in the grocery space, and is expected to soon launch online grocery services on its app.
In the past two years, the company has elevated Gaurav Gupta, its food delivery division head Mohit Gupta, and its Chief People Officer Akriti Chopra as co-founders with CTO Gunjan Patidar and CEO Deepinder Goyal, who continued to scale the business after Pankaj Chaddah moved on from Zomato in 2018.
Zomato’s major investors include likes of Info Edge, Tiger Global, Kora Capital, Sequoia Capital India, Temasek, and Ant Group, and they have received funding of over 600 million USD to date. Zomato achieved unicorn status in 2015 with a billion-dollar valuation which has since doubled.
The Initial public offering (IPO) of Zomato was launched on July 14 and was open for subscription between July 14-16; the shares were priced in the range of Rs 72-76. Almost 20% of the applications for IPO was through the stockbroking firm Zerodha. The last day saw a very strong response from qualified institutional buyers (QIBs) and non-institutional investors (NII). The company is eyeing a post-issue valuation of Rs 64,365 crore.
Currently, about 42% of the overall food ordering market are being placed online. The annual growth rate of the food industry is about 3.7%, with the online ordering and food delivering growing at an annual rate of about 15-20%. Online food delivery rates are expected to grow to more than $220 billion by 2025. With more innovations and growth expected in the future, Zomato is making a strong hold as one of the strongest leaders in the food tech space.