Zomato Success Story
Company Profile is an initiative by ListMyStartUp to publish verified information on different startups and organizations. The content in this post has been approved by Zomato.
There were days when we used to call different restaurants to place orders and again call up for corrections and directions and reservations. Then came applications like Zomato, which reversed the whole scenario and made it extremely simple for the consumers. Deepinder Goyal and Pankaj Chaddah founded Zomato in 2008, which eased the process of food delivery and eating out, with the help of which we now can enjoy the best food served by the restaurants in our locality.
Zomato has hit a valuation of $5.4 Billion on February 22, 2021, after its recent funding round on the same date led by Kora, Fidelity, Tiger Global Management, and others for $250 Million.
Zomato - Company Highlights
- Startup Name-Zomato
- Headquarter-Gurugram, India
- Sector-Food Delivery
- Founders-Deepinder Goyal, Gaurav Gupta, Pankaj Chaddah
- Founded 2008
- Valuation-$8 Billion (July 2021)
- Revenue-$540.61 mn (Rs 4192.4 crore in FY22)
- Total Funding-$2.1 billion
- Parent Organization-Zomato™ Media Pvt Ltd.
- Website-zomato.com
About Zomato and How it Works
Zomato is an Indian food delivery startup restaurant aggregator. It primarily provides concrete information, menus, and user reviews of the restaurants. Along with this, Zomato also has food delivery options from partnered restaurants in the selected cities.
Zomato - Founders & Team
The founders of Zomato are Deepinder Goyal and Pankaj Chaddah. Both are IIT graduates and were working with Bain & Co in New Delhi before they came together to launch Zomato.
Zomato Founders/Owners
Deepinder Goyal
Deepinder Goyal is an IIT Delhi alumnus. Goyal was not a good student back at school but he eventually made his way to the prestigious IIT. After completing his graduation, Goyal was hired by Bain and Company, where he served as a Senior Associate Consultant for a little less than 4 years, after which he founded Zomato.
Deepinder Goyal has waived off his salary for FY22. This was disclosed in a regulatory filing of Zomato dated June 7, 2022.
Pankaj Chaddah
Pankaj Chaddah is a BTech, Mechanical Engineering graduate from IIT Delhi. Chaddah completed his graduation and then went to join Bain and Company, where he served for two and half years before joining Deepinder to found Zomato. However, this co-founder resigned from Zomato in May 2018, where he served as a "conscience keeper, and a support system during upheavals," as he had described his role, for over 10 years. Chaddah founded Shyft (formerly Mindhouse) in November 2019, where he currently serves as a Co-founder.
Aakriti Chopra, one of the early employees of Zomato, has been promoted to the Co-founder position. She worked as the Chief People Officer when the promotion landed to recognise her contributions to the company. Aakriti Chopra is the wife of Albinder Dhindsa, the chief of Blinkit, and her promotion came in on June 9, 2022, with the signalling of the companies coming closer. So now, the revelation is somewhat interesting that the Zomato Co-founder, Aakriti Chopra is married to the Founder of Blinkit, Albinder Dhindsa.
Gaurav Gupta, who initially joined as the Global Head of the Advertising sales of Zomato and COO and was later promoted to the Co-founder position of the platform, resigned on September 14, 2021. Gaurav headed the supply of the food-tech company.
Zomato has been shutting down some of its business lines and subsidiaries, including its grocery delivery service, nutrition and nutraceuticals, and a bunch of its international subsidiaries since the company went public in July. Gaurav Gupta's resignation starkly followed the decision of the company for taking down its grocery delivery and nutraceutical services.
On his parting, Gaurav Gupta had drafted a beautiful mail that he sent to everyone at Zomato with a special address to Deepinder Goyal. Zomato CEO, Deepinder Goyal had not failed to reply to the touching mail.
Furthermore, Deepinder also tweeted about the exit of his co-founder, thanking him for the amazing journey they spent together. Here goes his Tweet:
The Zomato recruiting team is of the ideology that hiring the correct people is primary for their company's startling growth. Also, recruiting this pool of employees was one of the major milestones achieved while building the foundation of Zomato. Now, the company has a squad that is vital in bricking their dream project. The Zomato number of employees has been listed between 1001-5000 in numbers as per the Zomato LinkedIn profile.
The Zomato food delivery business is not the sole business of Zomato. It now has numerous businesses working under the same label and would allegedly get a new parent "Entity". While Deepinder Goyal is the CEO of Zomato, the other arms of the business like Blinkit and Hyperpure are led by Albinder Dhindsa and Vishal Kumar. Mohit Gupta leads the food business of Zomato.
Zomato's Gallant Team of Employees
Jithin Vijayan is a Zomato delivery agent who hails from Kochi, Kerala. He travelled 12 km amidst heavy downpour and successfully bought medicines for a sick baby. It was while he was delivering one of his late-night orders that Jithin learned of a mother and a one-year-old, sick baby, who ordered the food. However, finding the condition of the baby, Vijayan rushed to buy medicines from a shop 12 km away from her house. This made Zomato award him with a Zomato Gallantry Award. There was another delivery agent, Shivaji Balaji Pawar, who was recognised for "Going Above and Beyond". Pawar was born with a polio infection, but still, he hasn't refrained from playing top-level cricket. Yes, Zomato truly has heroes to be proud of!
Zomato - History | How was Zomato Started?
All of it started when the founders, Deepinder Goyal and Pankaj Chaddah were in their office in New Delhi and they came across so many people who were waiting for a long time just to acquire a flash of the menu card. And in that exact moment, the idea for obtaining a solution was planted in this duo’s minds and that led them to launch Zomato, formerly known as ‘Foodiebay’.
Zomato turned 13 this July 2021, and the brand celebrated its birthday in style on July 10, 2021. Pramod Rao, who served Zomato as the VP of Marketing and has a big hand in building the marketing team and scaling up the operations of the brand shared his message congratulating the brand along with a jovial video of the brand at work on July 10, 2021, via his LinkedIn profile.
Wondering what they begin with? They uploaded the soft copies of the menu cards on the website. Following this, everyone in the office started using this, which led to a lot of time-saving for them. Subsequently, this increased the traffic on their website and soon enough they expanded their website to make it available to everyone in the city.
Zomato - Startup Launch
When the founders launched this website, it wasn’t called Zomato back then, it was called Foodiebay. And it initially started out in Delhi, then the services were extended to cities like Mumbai and Kolkata.
With the tremendous user base and growth rates that Foodiebay brought in to the founders, they decided to modify it and take it international. That’s when this venture started being called Zomato, as we know it today. It was in 2010 when Foodiebay was officially rechristened as Zomato.
Zomato - Mission and Vision
Zomato states that their mission "is to ensure nobody has a bad meal."
Zomato co-founder Pankaj Chaddah had declared that the vision of Zomato "is to be the global platform when someone is looking for food locally."
Zomato - Name, Tagline, and Logo
The founders changed Foodiebay to 'Zomato' to make it more prominent, simple to memorize, and primarily to eliminate the confusion with the website eBay.
Zomato's tagline is "Never have a bad meal".
Zomato - Business Model and Revenue Model
The main source of revenue for Zomato now is the advertisements channel that the portal offers to display. This accounts for most of its revenue followed by the commissions that it charges to the restaurants. It works on a commission business model.
Zomato announced that it will do away with commissions it charges restaurant partners on takeway orders. In a bid to help them recover faster from the economic crisis that the Covid-19 pandemic brought in, Zomato made the announcement, which also offered customers an alternative to Zomato delivery service or home delivery.
Zomato commission-free takeaway service for restaurant partners
Swiggy - Delivering happiness at your doorstep!
Craving a delicious bite of blueberry cheesecake in the middle of the day atwork? But traffic, unending queues at café, waiting for the order and thencoming back to work-Is as hectic as it sounds! Since August of 2014, orderingfood has been revolutionized in India; it became as easy as one wants …
Zomato - Startup Challenges
The most significant hurdle in the Zomato journey was to find a way to cover all the restaurants in all the areas in all the pivotal cities so that the consumers who hinge on them do not miss the finest restaurants in the locality. This milestone has been omnipresent since its inception and continues to drive considerable efforts on the venture’s part.
But this is not it. From time to time, Zomato faced numerous serious challenges that were "make or break" situations for the team. The challenges faced by Zomato include:
Domino's India Might Take its Business Away
Commissions are rising for the food delivery startups Swiggy and Zomato, which might also make some of the businesses independent. Big providers like Domino's India might leave Swiggy/Zomato if commissions rise this way, as per reports.
Investors Exiting Zomato Captable
Uber, which acquired 7.8% of Zomato shares when its Indian subsidiary of Uber Eats was acquired by Zomato, exited Zomato captable on 3rd August 2022. These shares were sold at a price of $392 mn as an act that will cushion Uber against the losses the business is taking these days. Fidelity and ICICI Prudential Life Insurance bought these Zomato stakes.
Tiger Global sold half of its Zomato shares, as per reports dated August 4, 2022. The American investment firm sold the shares in the open market between July 25th and August 2nd, 2022, as mentioned in the reports. Tiger Global had a total of 5.11% shares in Zomato, which has now become 2.77% after the selloff.
Zomato Shares Dip Down after Blinkit Acquisition
The Zomato acquisition of Blinkit was revealed on June 24, 2022, after the market hours. However, on Monday, June 27th, 2022, the Zomato shares began to dip. They tanked around 6.6% and were valued at INR 65.85 on the NSE. According to the analysts, the addition of another loss-making company was disapproved by many investors, however, Blinkit might add long-term to the foodtech unicorn. Zomato chief Deepinder Goyal mentioned that the Blinkit business is synergistic with Zomato's core food business, which would lend the foodtech giant "the right to win" in the long run.
The Zomato shares that continued to dip after the Blinkit acquisition fell for the third straight session, as reported on June 29, 2022, and were registered at Rs 57.20, thereby declining over 5% on the NSE. All of these have already resulted in Zomato losing over Rs 10,250 crore of its market capitalisation, which stood at Rs 45,116 crore when last reported on June 29, 2022. So far, the Zomato shares have fallen by over 60% in 2022. Over 4 sessions, the Zomato shares fell over 23%, when checked on July 1, 2022.
On the drastic dip of Zomato's shares, which sagged by around 23% since the acquisition of Blinkit, numerous high net worth individuals (HNI) from Mumbai, which are the Zomato investors, reportedly wrote to SEBI, who mentioned that Zomato has not made disclosures in time about the Blinkit acquisition. Many other investors also alleged, as per the reports, that with the sudden acquisition of Blinkit, they have suffered huge losses. However, Zomato, on the other hand, said that the acquisition was timely and according to the rules of the Securities and Exchange Board of India (SEBI). Besides, the foodtech company also added that it has "complied with the applicable laws and relevant Sebi guidelines", and made "necessary disclosures upon the approval of the transaction by the board".
Zomato's shares further plunged to an all-time low on July 25, 2022, to dip as low as Rs 46 during the early hours of trading on Monday. This is the first time that the shares of Zomato dropped below the Rs 50-mark. These shares further dived 7% again on July 26th after they plunged 13% on July 25th, to hit a new 52-week low of Rs 41.25. The food delivery company's market valuation was reported to be around $4.1 bn (Rs 32,793.77 crore) on July 26, 2022. Amid huge sell-off pressures, Moore Strategic Ventures exited the Zomato captable, as of July 27, 2022, by parting with the entire holding of 4.25 crore shares in the company at Rs 44/piece.
Zomato has rejected the revised valuation that EY brought, which lowered the foodtech unicorn's share price after it acquired Blinkit. Though the updated share price submitted by Ernst & Young has not been disclosed, Zomato has kept the share price at Rs 70.76 per share, unchanged.
Zomato's Unfair Trade Practices Controversy
Zomato has been bogged down by numerous allegations of unfair trade practices. One of the LinkedIn posts by Rahul Kabra during the first week of July 2022 mentioned that Zomato wants to make more money per order than the restaurants or the food service providers. In his post he showed two bills - one from Zomato and the other from the food service provider, which were Rs 690 and Rs 512, thereby showing a difference of more than Rs 100. "Zomato brings visibility and more orders to the food service provider, should it charge such a high price?", asked Kabra.
In response, Zomato replied on July 6, 2022, that it does not have any control over the prices that are implemented by the restaurant partners on the platform. However, the startup further added that it has already conveyed the feedback to the restaurant partner and has requested them to look into the same.
NRAI or the National Restaurant Association of India has been chasing Zomato and Swiggy for the exorbitant commissions both of them have been charging for quite some time. It claims that the foodtech players swept away 25-35% of each order value as commissions between 2020 and 2021. It had earlier even complained to the CCI for the same and for the Zomato Gold subscription programme.
Including Food Nutritional Info of All Foods by FSSAI
FSSAI, often read as Food Safety and Standards Authority of India has asked food delivery providers like Zomato and Swiggy to include all the nutritional content and allergens of all the foods that are sold on their platforms. This is to be started from July 1, 2022, onwards, as of the new dated June 16, 2022. According to Arun Singhal, chief executive of FSSAI, this will help the people to be aware and informed of the food that they are ordering online and the nutritional content and allergens present in them. Also, Zomato is required to ask its business partners (restaurant operators) who run over 10 food outlets and has an annual turnover of over INR 20 crore to apply for a central food licence.
Gig Worker Shortage
The food delivery and quick commerce industry have been witnessing a gig worker crunch lately. This was also apparent in the FY22 financial and operating performance report of Zomato, and in response to this, Zomato said that the gig worker shortage will be normalised in a few weeks, as of May 24, 2022 reports. The whole worker shortage has developed due to the COVID-19-induced migration of workers. Goyal also pointed out that many of the workers have moved to other cities and have chosen other jobs and roles as more and more are opening up their economies. This shortage of workers is now back to normal, as per the reports on July 12, 2022, where Deepinder Goyal emphasised the fact, saying that Zomato is willing to hire 15,000-20,000 a week.
Zomato Shares Stoop Low, its Investors' Money Half Wiped Out
Zomato has wiped out more than half of the money that came from the investors, as of May 6, 2022. The shares of Zomato have fallen by 55% since the beginning of the new year 2022. They have tanked by around 28% in the last month (April) alone. The stock price of Zomato dropped to become Rs 71.6 on 29th April, which was last recorded at Rs 141.35 on 3rd January 2022. The shares of Zomato continued to tank on the NSE and were recorded at Rs 61.50 on May 5, 2022, which was reported to have dropped by more than 7% to close at Rs 64.90 on May 4. The shares of the food-tech giant were also recorded to have fallen to their all-time low of Rs 60.50 during the day on May 5th.
Zomato is under CCI scrutiny due to bad "conduct"
Both the food-tech giants Zomato and Swiggy, have been under the Competition Commission of India's (CCI) scrutiny. The conduct of both the food-tech unicorns has been unacceptable, as declared by the regulatory body, according to the reports dated April 4, 2022. The complaints have been received against both Zomato and Swiggy that they indulge in deep discounting, they pay their partners late, and most importantly, they charge exorbitant commissions. The investigation into this matter is to be completed by the Director-General of CCI within the next 60 days.
Zomato, in the meanwhile, has also announced a new food policy that will be effective from April 18, 2022, onwards, where the food tech giant might temporarily disable the ordering of food from particular restaurants if complaints are received against the food quality of the restaurants. However, it is also important to note that Zomato will also authenticate the food quality complaints thoroughly before doing so. The popular food tech company has deferred the implementation of this new food policy to 3rd May after it faced major backlash. Now, with the looming cloud of risking the reputation of the restaurant partners as well as the customer trust, the unicorn food aggregator is wondering when it can implement the same, and whether the implementation of any such policy will be any good or not.
Zomato Layoffs
In 2015, Zomato had to lay off 300 employees to curb losses, which obviously had large-scale implications on the organization as 10% of this layoff was in the US.
Failed Rebranding Attempt
In 2015, in the States, Zomato acquired Urbanspoon and rebranded the company as their own. Unfortunately, the rebranding did not come out as expected and the venture failed miserably.
Roll Back of Operations
In 2016, things went so out of control that as a result, Zomato had to roll back its operations in several countries including the US, UK, Chile, Canada, Brazil, Sri Lanka, Ireland, Italy, and Slovakia. And when they resumed presence, Zomato had to resort to remote services.
Zomato decided to shut down its grocery delivery service as per the reports dated September 13, 2021. The company has informed its grocery partners via email that the company will put an end to its pilot service with effect from September 17, 2021. While addressing the same a Zomato spokesperson said, "We have decided to shut down our grocery pilot and as of now, have no plans to run any other form of grocery delivery on our platform," a Zomato spokesperson said.
The food aggregating and delivery giant had started its grocery delivery business when the Covid-19-induced lockdown was announced in 2020 and the restaurants and eateries were closed all of a sudden. However, ever since India started unwinding, Zomato has been back in line with its food delivery service. This is why the company had earlier stated that it would be scaling down its grocery deliveries in September 2020, within barely five months of its launch. However, Zomato again resumed delivering groceries online through its apps post-IPO, but the company has finally decided to shut it down completely, as of September 13, 2021.
The cause of such a decision can be associated with poor customer experience, gaps in order fulfilment, and the sudden surge in competition from its rivals post-lockdown. The food delivery giant has invested around $100 million in the grocery delivery platform, Grofers, and believes that the investment would be generating better income for the company than its effort to boost in-house grocery delivery.
Zomato has shut down its South African operation after putting an end to its US and UK subsidiaries on January 17, 2022. With the closing of Zomato South Africa Proprietary (Pty) Ltd., the company aims to further its hold in India.
Zomato eportedly closed its Singapore and United Kingdom (UK)-based subsidiaries in August 2021. The closure of the businesses of Zomato has also been disclosed in its stock exchange filing on September 1. Previously the company has also wound up its US subsidiary Nextable Inc.
The company has also announced to pull down the shutters on its nutraceutical business hours after it declared to exit its grocery delivery business. The nutraceutical line of products consisting of health and fitness products was started in 2020. In view of tapping this opportunity, Zomato appointed Chief Operating Officer Gaurav Gupta as the head of this division for five years. Gupta was also quoted as saying, "This business can potentially be a large value driver for Zomato in the future," as soon as he was suggested the job role.
However, the company finally decided otherwise and had to take this harsh decision at a time when the government is looking to become stringent about private label norms for marketplace businesses in the country.
Cyberattacked
Then came the year when Zomato's existence went at stake when in 2017, it faced its biggest cyberattack by a hacker that had breached 17 million user records from the company database. While its concerns were overpayment and user card and account details being accessed by the hacker, Zomato soon claimed that only the hacker could only have access to the names, user IDs, email addresses, usernames, and password hashes. Soon after, this breach was resolved by communicating with the hacker and as it came out he just wanted to prove that there were security loopholes in the system, fixing which can secure the system as well as the company.
Logout Campaign
In 2019, the #logout campaign surfaced when the restaurants listed on the portal called out it for eating into their profit margins through Zomato Gold and Infinity Dining features, a Zomato feature that provided heavy discounts. And it so happened that the restaurant association highlighted these issues like “unreasonably high commissions, payment terms and arbitrarily applied additional charges” that the restaurants were being charged to be a part of the Zomato initiative, Zomato Gold.
Post this campaign, Zomato discontinued the Infinity dining service, also revised and altered Zomato Gold rules while laying off, and also faced tremendous protests from the partnered restaurants.
Despite all of this, Zomato registered a rise of 177% of restaurant partners and got on board an additional 73K restaurants. Zomato has over 1.4 million listed restaurants and 12K+ restaurant partners aligned with its app, as of August 2021.
RejectZomato
Zomato has seen a number of controversies and one of the recent incidents where a customer service representative of the company didn't know Tamil and instead of giving a customer from Tamil Nadu a refund lectured him on the importance of knowing "Hindi", as the national language. The customer eventually took to Twitter and soon the #RejectZomato trend was popularized on October 19, 2021. This incident questioned the commitment of the food delivery major towards its non-Hindi speaking community of India and led to the expulsion of the customer support staff on the grounds of her behaviour being “against the principles of sensitivity”. The leading food tech company also promised of establishing a local Tamil call centre soon in Coimbatore. However, the customer support agent was reinstated 3 hours after this incident. Zomato CEO, Deepinder Goyal later tweeted:
Zomato - Funding & Investors
To date, Zomato has raised close to $2.1 billion in funding. Recently (Feb 2021) Zomato closed a $250 million funding round, led by existing investors Tiger Global, Kora, and Fidelity. Zomato's valuation touches $5.4 Billion. In this round, Kora pumped in $115 million while Fidelity invested $55 million and Tiger Global invested $50 million.
The $660 million round led by Kora and Tiger Global Management and the $250 million round led by the same investors with Fidelity and some other investors joining them are two of the largest rounds that Zomato received in recent times. The Ant Financial led $210 million funding round that came in October 2018 was the last major before these rounds. Alibaba and other Chinese investors have largely contributed to the growth of the food-tech startups in India, where both Zomato and its rival Swiggy have received funds from Chinese giants like Alipay, Ant Financials, and more.
Zomato raised funds worth Rs 4,196 crores from its marquee anchor investors, which is supposed to be a part of the anchor book allocation. This fundraising round comes a day before the brand goes public, as per the reports on July 14, 2021. Info Edge India is Zomato's largest shareholder with over 18.4% stakes.
Zomato turned unicorn in March 2018. The food tech giant entered the famed unicorn club of Indian startups in the same month when its co-founder Pankaj Chaddah moved out of the company.
Here is a list of all the funding rounds of Zomato -
Zomato - Investments
Zomato has invested in 15 companies to date. The most recent investment of the food tech unicorn was reported to be in Urban Piper in its Series B round, where the Deepinder Goyal-led food delivery company funded the other startup with $24 million. The previous investment of Zomato was worth $150 million, which is invested in Blinkit on March 15, 2022. This was the second investment round that Blinkit saw coming from the second most valuable food delivery company in the same month. The previous round was worth $100 million.
The food tech unicorn's board approved the acquisition of 16.66% stakes in the kitchen automation and robotics startup, Mukunda Foods, for $5 Million on March 16, 2022. The acquisition of the 2012 founded food robotics company Mukunda, will enable help Zomato to empower the restaurants to become more efficient with a lower cost of manpower, and would also reduce the wastage along with increasing the kitchen throughput.
It previously also invested in the ad tech startup, Adonmo Pvt Ltd, and in UrbanPiper Technology, which is a B2B software platform on January 28, 2022. The Gurugram-based food delivery giant has invested $5 Million in UrbanPiper and $15 Million in Adonmo then.
Zomato co-founder and CEO Deepinder Goyal, who had first invested in Blinkit in 2015, has sold his stake to Tiger Global before it hits the public market ahead, as per the news dated February 3, 2022. The Gurugram-based food unicorn has again invested in Blinkit in June 2021.
Zomato - Acquisitions
In 12+ years of its existence, Zomato has acquired 15 companies. FITSO was the last acquisition of Zomato that came on January 20, 2021, in a deal worth over Rs 80 crore. After this, the popular foodtech giant acquired Blinkit on June 24, 2022, which is the latest Zomato acquisition.
The acquisition of Uber Eats - India, which was materialised on Jan 21, 2020, remains one of the most prominent acquisitions of the company. Zomato acquired Uber Eats - India for $350 million. Through this acquisition, Zomato added over 70K active delivery partners that existed with the Uber Eats network.
Zomato had first declared that it would be acquiring around 9.3% stakes in Grofers as per the filing with the Competition Commission of India. Though this stake was a minor one, the company looked to acquire Grofers in the long run, as per some sources on request for anonymity. Through its tweet dated August 13, 2021, the Competition Commission of India (CCI) sanctioned the Zomato-Blinkit (then Grofers) deal where the former company will be acquiring 9.3% stakes in Grofers (Blinkit).
However, since it has pivoted, Blinkit lost its unicorn status and was struggling with a lack of funds, when Zomato thought it fit to help Blinkit. This is why Zomato extended a $150 mn loan to Blinkit on March 16, 2022, after investing nearly $100 mn in the same month. The two startups eventually looked for a merger, which will be materialised via an all-stock deal, valuing Blinkit at $725 million. However, the Zomato Blinkit merger was the pending sanction of the board of Zomato, which has finally revealed to conduct a meeting on June 17, 2022, and give its nod regarding the deal of acquisition of Blinkit. It has also been revealed that Zomato will not need the Competition Commission of India's (CCI) nod for this acquisition deal, and will be evoking the 'de minimise' exemption, as per the reports dated June 7, 2022. However, that didn't happen. Zomato eventually mentioned a board meeting that will be conducted on June 24, 2022, where the Zomato board will be discussing the potential acquisition traction, which will likely be providing its consent to the Zomato-Blinkit acquisition. This deal, which was worth $568 mn then, was meant to be approved on June 24, 2022, but it was pending some shareholders' approval, but now the majority has approved the same.
As per the deal, Zomato will acquire up to 33,018 equity shares of Blink Commerce Pvt Ltd from its shareholders. This was materialised for a total consideration worth Rs 4,447.48 crore in stocks. As a result, it is prominent that Blinkit received a 43% haircut in its valuation. Zomato's acquisition of Blinkit has been approved by 97% of its shareholders, as per the company's BSE filing accessed on July 28, 2022.
Zomato - Growth and Revenue
Zomato has grown far and wide ever since it brought in the disruptive idea of food delivery in the Indian ecosystem of startups. As part of its new growth initiative, the company is looking to come up with ultra-fast food deliveries for which Zomato is in talks with restaurant partners and cloud kitchens. As per this new initiative announced on March 18, 2022, Zomato will be launching a faster food delivery service that will deliver food within 10 minutes of ordering. Zomato has already tried this experiment briefly in Bengaluru in 2021 and might pilot this in some cities in the coming April 2022.
Zomato Co-founder and CEO, Deepinder Goyal has mentioned that Zomato is racing towards profitability, and at the same time, keeping growth in mind. Furthermore, it is also looking to protect the long-term view of how the Zomato business would look in the next 10-20 years from now. Goyal said, “even our largest cities like Delhi are growing as fast as the smallest towns. Every small area within Delhi is equal to a small town. The penetration is going up, and the frequency at which customers order is going up.”
Zomato now has 3 different brands in operation - Zomato, Blinkit, and Hyperpure. This is a reason why Zomato now needs a parent entity, as per Zomato chief Deepinder's words. This entity would allegedly be named "Eternal", as of August 1, 2022. Zomato's food delivery business, Blinkit, Hyperpure, and Feeding India will likely be a part of the "Eternal" umbrella. The Zomato parent would also reveal a new logo soon.
Zomato's Shares Rise
As soon as Zomato declared its Q4 results in FY22 on May 23, 2022, the food tech unicorn's shares showed up as 4% positive the very next day. The Zomato shares were on a continuous rise and were trading at Rs 67.05 at 9:38 am on May 24, 2022. The Zomato shares rose nearly 14% on the BSE on May 24, 2022, and settled 13.65% higher at Rs 64.95. The shares of Zomato went up by 3% to become Rs 56.20 during intraday trading on August 8, 2022, on BSE. This happened after FTSE found it fit to increase the investability weight of the foodtech unicorn's stocks.
Here's a look at Zomato's growth highlights:
- By 2011, Zomato had successfully established a monopoly in Delhi NCR and had moved to other Indian cities like Pune, Bangalore, Chennai, Hyderabad, and Ahmedabad.
- Zomato also kept up with the smartphone boom and timely launched its mobile application. This greatly contributed to its growth.
- By 2012, Zomato had begun its overseas operations, full-fledged in countries like UAE, Sri Lanka, Qatar, United Kingdom, Philippines, and South Africa.
- In 2013, it added Turkey, Brazil, and New Zealand to its ever-growing list of expansions.
- In 2017, Zomato claimed that it was operating profitably in all 24 countries along with rolling out a zero-commission model. The company claimed that its revenue grew by 81% in this particular year.
- In the same year, the online ordering services of the company crossed the mega milestone of 3 million orders per month. Zomato proudly boasts of serving 1.5+ million orders in a day
- If we look at the numbers, Zomato has recorded a 225% rise in revenue in the first half of Financial Year 2020.
- Zomato delivered its 1 billionth order in July 2021.
- In an unprecedented order spike during New Year's eve, food delivery giant Zomato recorded delivering over 2.5 mn orders packing in 7100+ orders per minute. The Deepinder Goyal-led food delivery unicorn reported delivering 4250 orders per minute during the same time in 2020.
Zomato Future Foundation
Zomato Future Foundation will be designed as a Zomato entity that will cover the costs of education of up to 2 children of all the Zomato delivery partners. The total costs covered by Zomato Future Foundation would be Rs 50,000 per child per annum on actuals. However, the particular employee who will be able to avail of such a benefit will have to exhibit a quality performance that should be over a certain benchmark and has to be associated with Zomato for 5+ years. Once the employee crosses the 10-year mark in his service in Zomato, the amount of the education expenses covered by the company will become Rs 1,00,000 per child per annum. Furthermore, Zomato will also provide scholarships for higher education over and above these limits for children who will be exceptional in their performance and potential.
Zomato - Hyperpure
Hyperpure by Zomato is changing the way restaurants work. It is Zomato’s B2B food tech vertical. Hyperpure allows restaurants to buy everything online from vegetables, fruits, poultry, groceries, meats, and seafood to dairy and beverages. It claims to be working directly with farmers, mills, producers, and processors to source these products thus ensuring quality and consistency.
Zomato - Zomato Payments
Zomato announced the incorporation of a new subsidiary, Zomato Payments Private Limited, which will be wholly owned by the company. While filing, Zomato disclosed that it has incorporated the subsidiary with a subscription of 10,000 equity shares of Rs 10 each aggregating to Rs 1,00,000.
The Indian food delivery giant is looking to work as a payment aggregator and offer payment gateway services, as per the RBI guidelines with its freshly incorporated subsidiary. The all-new Zomato payments will serve as a payment and settlement system, along with offering payment gateway services, and will also act as a payment solution for paying goods, services, and utility bills with the help of mobile phones.
Zomato - Zomaland
Zomaland is India's Grandest Food and Entertainment Carnival that brings together some of the top eateries, musicians, DJs, comedians, and interactive installations and carnival games, under one roof. It is like the offline version of its Zomato Collections, where it curates and brings the best restaurants in the city together.
It is a flagship event of Zomato. In 2018, The debut edition of this carnival across Delhi, Bengaluru, and Mumbai saw over 100,000 visitors. Since then it has grown to be held in over 10 cities and has also partnered with major brands including the Singapore Tourism Board.
Zomato Revenue, Expenses and Financials
Zomato's FY20 revenue was Rs 2,486 crore. Its revenue was Rs. 1312.6 crore in FY19. Zomato filed its quarterly earnings report for the first time ever after it went gone public in July 2021. According to the report, Zomato had adjusted gross revenue of Rs 1,160 crore, which consists of Rs 844 crore of revenue from operations and Rs 316 crore worth of customer delivery charges. Zomato's Revenue Breakdown for FY19-20 was as follows:
FAQs
What does Zomato do?
Zomato is a foodtech company, which helps users scan through the restaurants and eateries in their town, book reservations, share reviews, opt for home deliveries from them, and more.
What is Zomato's Tagline?
Zomato's tagline is "Never have a bad meal".
Who are the Founders/Owners of Zomato?
The founders of Zomato are Deepinder Goyal and Pankaj Chaddah
When was Zomato founded?
Zomato was founded in 2008 by Deepinder Goyal and Pankaj Chaddah in Gurugram, India.
Where did Zomato start?
Zomato started in Delhi NCR and is currently headquartered in Gurgaon, Haryana.
What is Zomato South Africa?
Zomato South Africa Proprietary (Pty) Ltd. was a Zomato subsidiary that operated in South Africa. However, Zomato South Africa was shut down by Zomato in January 2022.
How does Zomato make Money?
The main source of revenue is the advertisements channel that the portal offers to display. This accounts for most of its revenue followed by the commissions that it charges to the restaurants. It works on a Commission Business Model.
Is Zomato an Indian Company?
Yes. Zomato is headquartered in Gurugram, India.
What is the Zomato profit?
Zomato hasn't been profitable yet. Its net losses tripled to become Rs 360 crore in Q4 2022.
What number of orders per day does Zomato deliver?
Looking at the Zomato number of orders per day, we can safely conclude that the foodtech delivers over 1.5 million orders daily.
Will Zomato-blinkit merger happen?
Zomato had finally acquired Blinkit in an all-stock deal worth $568 mn on June 24, 2022, when its board approved the transaction.
