Zomato adds Lunchtime, Obedovat restaurant guides to its menu2 min read . Updated: 22 Aug 2014, 04:16 PM IST
Zomato plans to enter 10 more markets
Zomato plans to enter 10 more markets
New Delhi: In a move to expand its footprint in international markets, Indian restaurant search and discovery portal Zomato has acquired two more restaurant guides, Lunchtime and Obedovat, in the Czech Republic and Slovakia, respectively, and plans to enter 10 more markets in the coming months.
Zomato, one of the world’s largest restaurant discovery services, will now be present in 15 countries. With the acquisition of Lunchtime and Obedovat for a combined $3.25 million (around ₹ 20 crore), the company will build an integrated product over the coming months.
In July, the company acquired New Zealand’s restaurant search website MenuMania for an undisclosed amount. “Over the next two years, the company will infuse $2.5 million into its Czech Republic and Slovakia operations," said Deepinder Goyal, co-founder and chief executive officer of Zomato.
Zomato’s shopping spree does not end here as it plans to enter 10 new markets over the next 5-6 months through organic and inorganic expansion. It will launch operations in countries such as Canada, Ireland, Poland, Malaysia, Vietnam, Jordan, Oman and Colombia, according to the company’s co-founder Pankaj Chaddah. The expansion plans within India and globally will require the company to raise money in the next calendar year, which will be significantly higher than its last round of $37 million it raised in November 2013 from Sequoia Capital.
Zomato was founded in 2008 by Goyal and Chaddah and has so far raised $53.3 million from investors Sequoia Capital and Info Edge (India) Ltd, an India-listed company that owns the jobs portal Naukri.com. It employs around 800 people worldwide.
Zomato is India’s first truly global application for restaurant discovery and listings. Two years ago, the company used to get 100% of its traffic from India. Today 50% of its user base comes from international markets.
“We expect 70-75% of our user base to come from international markets within one year," said Chaddah.
Zomato isn’t the only online food listing company in India. It faces competition from companies like Burrp, a Network18 Group company; indirectly it also competes with food ordering websites like London-based Just Eat, Foodpanda and search portal JustDial. Globally, Zomato faces intense competition from firms such as US-based Yelp and Time Out.
According to Anand Ramanathan, an associate director at consulting firm KPMG, the growing food services space is the key growth driver for companies such as Zomato. “Eating out in terms of share of wallet is growing much faster within the discretionary spends. Food services is the fastest growing segment in the consumer market because of lifestyle changes, convenience, more experimentation and greater exposure to international cuisine," Ramanathan said.
Zomato, which reported revenue of ₹ 31 crore in fiscal 2013-2014, expects to touch ₹ 90 crore by next fiscal. “We are growing three times every year," said Chaddah.
To be sure, Zomato makes money from advertisements placed by restaurants on its web portal. Zomato’s mobile application, which currently does not entertain any advertisements, will see mobile ads going live within 30 days. The company said it will eventually get into online food ordering too, directly competing with Just Eat and Foodpanda.
“It is a very challenging industry to be in because the restaurant space in India is unorganized making use of technology very difficult," said Ritesh Dwivedy, founder and chief executive, JustEat.
Dwivedy is not worried about rising competition in the space. “The food industry is quite big in India and given online food ordering is in nascent stage there is enough space to accommodate more than one player."