Page 1 of 6
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 05
May 2019
Available online: https://ejbss.org/ P a g e | 83
Zomato - Market and Consumer Analysis
MISS JYOTI CHHABRA, MR. ANUJ SHARMA ,MR. LUCKY VERMA
Institute of Engineering &Technology Alwar (Raj.)
DR. O P PATHAK
Department of Management studies- Institute of Engineering &Technology Alwar (Raj.)
Abstract-Some start-ups in the Indian Food & Beverages industry have
revolutionized the way we look around for places to dine. The scenario has
changed from previous practice when we had to actually go to restaurants to select
the restaurant and have the experience. Today, choice for the best places to have
food is just a click away. One can choose the best rated place and then decide to
enjoy there with friends and family.
Introduction
Zomato is an online website which provides restaurant search and discovery
service. It provides its customers a platform to evaluate choices for great places to
eat. It has set foot on 22 countries including India. The Gurgaon headquartered
company Zomato was named among the top 25 most promising internet companies
in India by Smart Techie Magazine. Because of its consistent performance and
success, it has been successful in getting regular investments from Info Edge
(India).
Purpose
The purpose of this case study is to do an analysis of the way Zomato has scaled
up its operations, expanded its business into various countries. We also plan to find
out the strengths, weaknesses, future opportunities and threats of their business
model.
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European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 05
May 2019
Available online: https://ejbss.org/ P a g e | 84
History
Zomato started as the website Foodiebay.com, by Deepinder Goyal, a post- graduate from IIT Delhi. Foodiebay officially started in July 2008 with a list of
1,200 restaurants in the Delhi NCR region. This database expanded to
2,000restaurants by end 2008. Expanded its reach to Kolkata ,Mumbai, Bangalore
and Pune within the next six months That is when Info Edge (India), the parent
company of the Naukri.com group, invested 4.7 crore (US$1 million) in the
business.. The brand name was changed due to a possible move outside of the food
vertical and also to avoid a possible conflict with eBay, because the earlier brand
name Foodiebay contained.
Research Methodology
The paper is based on primary and secondary research. Primary data was collected
from respondents and food bloggers through a set of questionnaires prepared to
Understand the perception of the brand ‘Zomato’. Secondary data was collected
from consumer food blogs, newspaper research articles & social media pages of
Zomato.
Investment
Between 2010-13, Zomato raised approximately US$16.7 million from Info Edge
India, giving them a 57.9% stake in Zomato. In November 2013, it raised an
additional US$37 million from Sequoia Capital and Info Edge India.
In November 2014, Zomato completed another round of funding of US$60 million
at a post-money valuation of ~US$660 million. This round of funding was being
led jointly by Info Edge India and Capital, with participation from Sequoia Capital.
In April 2015, Info Edge India, Capital and Sequoia Capital led another round of
funding for US$50 million.
Page 3 of 6
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 05
May 2019
Available online: https://ejbss.org/ P a g e | 85
In October 2018, Zomato raised $210 million from Alibaba’s payment affiliate Ant
Financial. Ant Financial received an ownership stake of over 10% of the company
as part of the round, which valued Zomato at around $2 billion. Zomato had also
raised an additional $150 million also from Ant Financial earlier in 2018.
Acquisitions
Zomato has acquired 12 startups globally.In July 2014, Zomato made its first
acquisition by buying Menu-mania for an undisclosed sum. The company pursued
other acquisitions such as lunchtime.cz and obedovat.sk for a combined US$3.25
million. In September 2014, Zomato acquired Poland-based restaurant search
service Gastronauci for an undisclosed sum. Three months later, it acquired Italian
restaurant search service Cibando.
Zomato acquired Seattle-based food portal Urban spoon for an estimated $60
million in 2015. Other acquisitions of 2015 include Mechanist in an all-cash
deal, the Delhi based startup Maple Graph that built Maple POS (renamed as
Zomato Base and Next Table, a US-based table reservation and restaurant
management platform).
In 2016, the company acquired Sparse Labs, a logistics technology startup and the
food delivery startup, Runner, in 2017. In September 2018, Zomato acquired
Bangalore-based food e-marketplace Tongue Stun Food for about $18 million in a
cash and stock deal. The same year, in December 2018, Zomato acquired
Lucknow-based startup Tech Eagle Innovations that works exclusively on drones,
for an undisclosed amount. Zomato said this acquisition will help them pave the
way towards drone-based food delivery in India, creating a technology that will
power hub to hub delivery network.
Controversy
In November 2017, Zomato had to apologize after the “MC BC” ad went viral.
There were mixed reactions regarding this ad on social media and some found it
very offensive due to which Zomato had to take the advertisement down
