If you are an Indian, living in the metropolis and find it easy to search a restaurant with the help of some clicks (on computer) and touch (Smartphone) visiting Zomato.com and its app; it is due to the man behind the brilliant idea of bringing all the information of restaurants together on one platform. Deepinder Goyal, the Founder and CEO of Zomato Media Private Ltd. Has a long story behind his success, with challenges and finally achieving massive success.
Zomato, earlier known as Foodebay.com has an interesting history behind its success and people attached to it.
For Deepinder Goyal, a post-graduate from IIT Delhi, the journey to the present-day Zomato (Foodebay then) started as a small exercise to help his colleagues negotiate huge stacks of menu cards with ease. It was in 2008 when he was working with Bain and Co. when he put all menu cards in his office on the Net. In one of the interview Goyal describes his initial experience as, “Within a month, all menu cards vanished because everyone started looking for them on the Net.”
From then on, a hunt to include more restaurants started. His juniors from college, Pankaj Chaddah and Gunjan Patidar (who are now Chief Operating Officer and Chief Technology Officer respectively), joined him in building the database. No one saw a business potential then. But then Foodiebay did start in July 2008 with a list of 1,200 restaurants in the Delhi NCR region.
It wasn’t enough, though. So the trio expanded the list to 2,000 restaurants by 2008-end. To reach out for a larger users and market, within the next six months cities like Kolkata and Mumbai restaurants were also listed.
Not long after that, Foodiebay got its first ad. Goyal and Chaddah quit their jobs in November 2009 to focus on Foodiebay full-time. Goyal describes his dilemma back then as, “Our salaries were funding this site. There was a huge cash crunch after we left our jobs.”
They, meanwhile, had to incur additional costs as they launched Pune and Bangalore listings, too. To keep afloat, they even asked their friends for help. Four friends together gave Rs. 10 lakh as loans.
Foodiebay did manage to continue its services. In fact, it did more than expected. They managed to break even the first month and getting private equity funding. The loans by friends had now been converted into equity.
The company earned its revenues in two ways – Selling ad space to restaurants, one. And two, taking a share from them on leads generated through Foodiebay. This is how the second source worked. Any visitor to Foodiebay could get a discount from the listed restaurants by feeding in his/her mobile number on the website. This automatically generated an SMS that had a discount coupon. This, when produced at the restaurant, is tracked to Foodiebay. And they therefore made commissions by promoting the restaurant.
Goyal’s company now had a revenues of about Rs 4.5 lakh a month, three-fourths of which came from selling ad space. This was where the website had to walk the thin line. It listed reviews on restaurants from the actual customers that are sometimes negative. This led the websites loose quite a few advertisers because of bad reviews. Ultimately, they got ads only from good restaurants.
Handy money for expansion had come from Info Edge, which had invested Rs 4.7 crore in the start-up. Info Edge already had a presence in job, matrimonial and real estate search areas (naukri, jeevansathi and 99acres, respectively) but they wanted to expand their presence in the consumer internet domain.
The good news for Foodiebay was that Info Edge wasn’t looking at it as a financial investment. In other words, there’s no intention to exit after a few years, unlike regular PE funds. And it was more than glad to put in the second and third round of funding.
2010- Renamed to Zomato
The rebranding decision came in the wake of company moving beyond the ‘food’ category. They saw that if they wanted to touch broader horizons then the name “Foodiebay” wasn’t going to be the best option since it might restrict their perception as just a food website. And right then was the time to reflect deeply and think about what they should be christened as especially since they were going to invest heavily in marketing the brand. Another thought that was at the back of their minds was to prevent any overstepping of eBay when they start accepting online payments. Given these goals, they put their heads to the grindstone and took the decision.
2011- Launched mobile application
Zomato.com (previously known as Foodiebay.com), one of India’s largest online Food Guides and restaurant directories launched its mobile application for Android phones in 2011. The application was the first local-search application for android phones made by an Indian player. It allowed users to search for nearby restaurants based on the user’s location.
Available in the Android market for free, the application replicated all the features of the website and let the user look at the menus, contact details, reviews, photographs, location and discounts for restaurants on the phone itself. The application recorded over 200 downloads within the first couple of days after the launch. Zomato, which was already very popular as a website, has taken its first step to tap into the growing mobile market with this application.
By 2011, Zomato launched coverage in Chennai, Hyderabad and Ahmadabad. Also in 2011, Zomato launched applications for iOS, Android, Windows Phone and BlackBerry devices. Zomato also launched a print version of the content on the website in collaboration with Citibank in May 2012. The guides are marketed and sold under the name “Citibank Zomato Restaurant Guide”. During the launch, these guides were made available for four cities in India—Delhi NCR, Mumbai, Bangalore and Pune.As per press reports, Zomato got around 2.5 million visitors on its website in March 2012.
In September 2012, Zomato expanded to its first overseas location by launching its services in Dubai, UAE. This was followed by quick expansion into Sri Lanka, Qatar, the United Kingdom, the Philippines,South Africa, New Zealand, and more recently to Brazil, Turkey and Indonesia.
And the Flourishing Present
Founded out of a living room in New Delhi in July 2008, Zomato is now available in 41 cities across 12 countries as of today, with many more on the way. It employees 650 people across 12 countries, representing 21 nationalities; as of today, over 229,500 restaurants are listed, with more being added every day. The company has turned into something very beautiful, and has easy-to-use website and mobile apps. This was all possible only because of one man, Deepinder Goyal and his idea.