Zomato

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Zomato
TypePublic
ISININE758T01015
IndustryOnline food ordering
FoundedJuly 2008; 13 years ago (2008-07)
Founders
  • Deepinder Goyal
  • Pankaj Chaddah
[1][2]
HeadquartersGurgaon, Haryana, India
Area served
Worldwide
Key people
  • Deepinder Goyal (CEO)
ServicesFood delivery[3]
RevenueDecrease ₹1,994 crore (US$260 million) (FY 2021)[4]
Positive decrease ₹−816 crore (US$−110 million) (FY 2021)[4]
OwnerInfo Edge (18.6%)
Uber (9.1%)
Alipay Singapore (8.3%)
Antfin Singapore (8.2%)[5]
Number of employees
5,000+ [6]
Websitezomato.com

Zomato (/zoʊmɑːtoʊ/) is an Indian multinational restaurant aggregator and food delivery company founded by Deepinder Goyal and Pankaj Chaddah in 2008.[7][8] Zomato provides information, menus and user-reviews of restaurants as well as food delivery options from partner restaurants in select cities.[9] As of 2019, the service is available in 24 countries and in more than 10,000 cities.[10]

History[]

Zomato was founded as Foodiebay in 2008, and was renamed Zomato on 18 January 2010 as Zomato Media Pvt. Ltd.[11][12] In 2011, it expanded across India to Delhi NCR, Mumbai, Bangalore, Chennai, Pune and Ahmedabad.[13] In 2012, it expanded operations internationally in several countries, including the United Arab Emirates, Sri Lanka,[14] Qatar,[15] the United Kingdom,[16] the Philippines,[15] and South Africa.[17] In 2013, expanded to in New Zealand,[18] Turkey, Brazil and Indonesia, with website and apps available in Turkish, Portuguese, Indonesian and English languages.[19] In April 2014, it launched in Portugal, which was followed by launches in Canada, Lebanon and Ireland in 2015.[20][21][22][23]

In 2015, the firm acquired Seattle-based food portal Urbanspoon, which led to the firm's entry into the United States and Australia.[24] This U.S.-expansion brought Zomato into direct competition with similar models such as Yelp and Foursquare.[24]

With the introduction of .xxx domains in 2011, Zomato also launched zomato.xxx, a site dedicated to food porn.[25] In May 2012, it launched a print version of the website named "Citibank Zomato Restaurant Guide," in collaboration with Citibank, but it has since been discontinued.[26]

In February 2017, the firm announced plans to launch Zomato Infrastructure services, a service to help restaurants expand their presence without incurring any fixed costs.[27][28] In September 2017, Zomato claimed it had "turned profitable" in all 24 countries where it operated and introduced a "zero-commission model" for partner restaurants.[29] Towards the end of 2017, Zomato stopped accepting updates from its active users by not utilizing moderators to verify and make updates. Users of the app reported issues with new features to pay for orders.[citation needed]

Zomato reduced its losses by 34% to ₹389 crore[clarification needed] for the financial year 2016–17, from ₹590.1 crore[clarification needed] in the previous year 2015–16.[30][31] Zomato became a unicorn in February 2018.[32]

In September 2019, thefirm fired almost 10% of its workforce (540 people) tending to back-end activities like customer service, merchant and delivery partner support functions.[33] In April 2020, due to rising demand for online groceries amid the COVID-19 pandemic, thefirm launched its grocery delivery services named Zomato Market in 80+ cities across India.[34]

In April 2020, Zomato introduced Contactless Dining to get ready for a post-lockdown world, by eliminating the use of high-touch elements such as the menu, ordering, and bill payments through bar codes or the app while the staff will wear masks.[35]

In May 2020, Zomato further laid off 520 employees due to the COVID-19 pandemic.[36] Despite the fact that demand for services delivering food from restaurants and takeaways surged, Zomato's given reasoning for needing cuts is that coronavirus will be followed by an economic downturn, which could hit orders.[37]

In August 2020, Zomato drew praise for introducing a period leave policy, allowing female employees to take up to 10 days time off per year if they are unable to work due to menstrual cycle health effects. The policy applies to transgender employees as well.[38]

On 23 July 2021, Zomato went public, opening its Initial public offering at a price band of Rs 72-76 per share.[39]

Investments[]

Between 2010 and 2013, Zomato raised approximately US$16.7 million from Info Edge India, giving Info Edge India a 57.9% stake in Zomato.[40] In November 2013, it raised an additional US$37 million from Sequoia Capital and Info Edge India.[41]

In November 2014, Zomato completed another round of funding of US$60 million at a post-money valuation of ~US$660 million.[42] This round of funding was being led jointly by Info Edge India and Vy Capital, with participation from Sequoia Capital.[43]

While in April 2015, Info Edge India, Vy Capital and Sequoia Capital led another round of funding for US$50 million.[44] This was followed by another US$60 million funding led by Temasek, a Singapore government-owned investment company, along with Vy Capital in September.[45]

In October 2018, it raised $210 million from Alibaba's payment affiliate Ant Financia, which 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 from Ant Financial earlier in 2018.[46]

In September 2020, Zomato raised $62 million from Temasek, after previously committed capitol from Ant Financial never came through.[47]

In October 2020, as part of a Series J round of funding, Zomato raised $52 million from Kora, a US-based Investment firm.[48][49]

In February 2021, Zomato raised US$250 million from five investors, including Tiger Global Management, at a valuation of US$5.4 billion.[50][51]

Acquisitions[]

Zomato has acquired 12 startups globally.[52]

  • In July 2014, Zomato made its first acquisition by buying Menu-mania for an undisclosed sum.[53]
  • The company pursued other acquisitions including lunchtime.cz and obedovat.sk for a combined US$3.25 million.[54]
  • In September 2014, it acquired Poland-based restaurant search service Gastronauci for an undisclosed sum.[55]
  • In December 2014, it acquired Italian restaurant search service Cibando.[56]
  • It acquired Seattle-based food portal, Urbanspoon, for an estimated $60 million in 2015.[57]
  • Other acquisitions of 2015 include Mekanist in an all-cash deal,[58] the Delhi-based startup MapleGraph that built MaplePOS (renamed Zomato Base),[59][60] and NexTable, a US-based table reservation and restaurant management platform.[61]
  • In 2016, it acquired Sparse Labs, a logistics technology startup,[62] and the food delivery startup, Runnr, in 2017 (renamed from Roadrunnr when it acquired TinyOwl in 2016).[63]
  • In September 2018, it acquired Bengaluru-based food e-marketplace, TongueStun Food, for about $18 million in a cash and stock deal.[64]
  • In December 2018, it acquired a Lucknow-based startup, TechEagle Innovations, that works exclusively on drones, for an undisclosed amount.[65] Zomato claimed that the acquisition will help pave the way towards drone-based food delivery in India, building technology aimed at a hub-to-hub delivery network.[66]
  • On 21 January 2020, Zomato acquired its rival Uber Eats' business in India in an all stock deal, giving Uber Eats 10% of the combined business.[67][68]
  • On 29 June 2021, the frim signed a deal with Grofers to invest nearly $120 Million in the online grocery firm by acquiring 9.3% stakes of the company.[69][70][71]

Security breaches[]

On 4 June 2015, an Indian security researcher hacked the Zomato website and gained access to information about 62.5 million users. Using the vulnerability, he was able to access the personal data of users such as telephone numbers, email addresses, and Instagram private photos using their Instagram access token. Zomato fixed the issue within 48 hours of it becoming apparent.[72] On 15 October 2015, Zomato changed business strategies from a Full-Stack market to an Enterprise market[clarification needed]. This led Zomato to reduce its workforce by 10%, or around 300 people.[73]

On 18 May 2017, a security blog called Hack read claimed over 17 million accounts had been breached. "The database includes emails and password hashes of Zomato users, while the price was set for the whole package is $1,001.43 (Bitcoins 0.5587). The vendor also shared a trove of sample data to prove it is legit", the Hackread's post said. Hacked claimed details of 17 million users had meanwhile been sold on the Dark Web. Zomato confirmed that names, email addresses, and encrypted passwords were taken from its database. The company reassured affected customers that no payment information or credit card details were stolen[citation needed].

Zomato said the security measures it uses to ensure the stolen passwords cannot be converted back into normal text, but it still urged users who use the same password on other services to change them. It also logged the affected users out of the app and reset their passwords. "So far, it looks like an internal (human) security breach - some employee's development account got compromised", the company said in a blog post but later, when Zomato contacted the hacker, they discovered a loophole in their security. The hacker removed the stolen content from Dark Web asking for a healthy bug bounty programme.[better source needed][74]

Controversies[]

"Food has no religion" tweet[]

In July 2019, Zomato received a customer complaint that he was assigned a non-Hindu delivery boy for his food order in Jabalpur and had asked Zomato to provide a Hindu delivery boy. The customer alleged that Zomato had refused to change the rider after which he asked to cancel the order.[75] The customer then posted this incident on Twitter, after which Zomato responded to the message stating: "Food doesn't have a religion. It is a religion."[75][76][77] The company's response received positive comments on Twitter,[78] but some customers questioned the use of Jain food and halal tags on food items. According to the company, such tags are placed by individual restaurant owners, and not by Zomato.[79]

Logout campaign[]

On 17 August 2019, more than 1,200 restaurants logged off from Zomato because of their offer of discount programmes at dine-in restaurants.[80][81] In Pune alone, more than 450 restaurants stopped serving to Zomato Gold because of aggressive discounts and loss of business.[82] Its premium subscription-based dining out service Zomato Gold had 6,500 restaurants partners and a total of 1.1 million subscribers in India as of August 2019. As part of the campaign, around 2,500 restaurants logged out from the Zomato Gold service. After Zomato made some changes, National Restaurant Association of India still refused to accept the modified version of the plan, saying that the corrective measures would not resolve the key issue of deep discounts.[83] However, Zomato founder Goyal admitted mistake, became ready to rectify it and called for sanity and truce.[84][85] He also urged restaurants to stop #Logout campaign.[86][87]

2021 delivery partner assault accusation[]

In March 2021, a video was posted on Instagram by a Bengaluru-based model Hitesha Chandranee accusing Zomato delivery person of assaulting and punching her as she refused to pay money for the food he delivered. She claimed he delivered her food very late and they both argued and had a verbal duel and then the delivery executive hit her on the nose and escaped. Hitesha then shot a video with a bleeding nose and recalled entire incident and posted it on Instagram on March 9. After the post went viral, Bengaluru police then arrested the Zomato delivery executive named Kamraj and booked him for assaulting Hitesha. Zomato temporarily suspended Kamraj and paid for Hitesha's treatment and legal charges for Kamraj. Kamraj denied the allegations and revealed that it was the girl who assaulted and abused him and her nose got hurt by her own ring amidst the scuffle. After hearing Kamraj's story and seeing inconsistencies between Hitesha's accusations and her statements, people started tweeting and campaigning in support of Kamraj. Kamraj later lodged an FIR against Hitesha in Electronic city Police Station, and she was charged with wrongful restraint, assault, intentional insult, and criminal intimidation.[88] Hitesha did not appear before Police.[89]

Currently, police has stopped the investigation as they did not find any evidence in the case.[90]

"Hindi is our National Language" Controversy[]

On 19 October 2021, #Reject_Zomato trended on Twitter after a Zomato chat support executive asked a customer based in Chennai, Tamil Nadu to learn Hindi, falsely claiming that it was India's national language.[91][92] She also refused the customer his refund for a missing item by rudely saying, "People who don't know Hindi are liars."[93] The founder and CEO of the company, Deepinder Goyal, posted a public apology on Twitter but also said in a later post, "The level of tolerance and chill in our country needs to be way higher than it is nowadays", which further angered Tamil netizens.[94]

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