Zomato turns 12 – from a weekend project to a $3 billion company, here’s the startup’s journey over the years

• Zomato celebrated its 12th birthday on July 10.
• Zomato was founded as Foodiebay by Deepinder Goyal and Pankaj Chaddah.
• But the startup’s birthday celebration comes at a time when the company is reeling under the impact of the coronavirus pandemic.
  

Indian foodtech unicorn Zomato just celebrated its 12th birthday July10). The startup has come a long way from being a food listing platform to today being a one-stop destination for all things food.

How the company started

“It was towards the end of my five years at IIT that I was ordering a Dominos pizza and back then, you had to call and place an order. So while in college I started a food ordering company, it didn’t work. It was way too early,” Deepinder Goyal, co-founder of Zomato said in a recent Twitter live chat with the Shiv Nadar Foundation.

Goyal then dumped the idea of the company and went on to join Bain and Company. While in the corporate world, Goyal saw that people wanted a food listing platform as they looked for scanned menus and phone numbers to place orders. “That worked well and it's been 12 years of doing hundreds of other things post that,” he said.

Interestingly, it continued to be a weekend project for one and a half years and only after having revenue coming in, Goyal left the corporate world to start up.

Zomato over 12 years


2008 Founded as Foodiebay by Deepinder Goyal and Pankaj Chaddah
2010 raises angel investment and rebrands as Zomato
2012 Goes international with UAE launch
2015 Launches food delivery
2017 Launches membership program Zomato Gold
2018 Launches hyperpure, a B2B supplies business for restaurants
2018 Launches Food@work
September 2019 Launches videos on its platform
December 2019 Launches Zomaland
January 2020 Acquires Uber Eats
July 2020 Turns 12

Where Zomato stands today


But Zomato’s birthday celebration comes at a time when the company is reeling under the impact of the coronavirus pandemic. Zomato has doubled its revenue from $192 million in FY19 to $394 million in FY20. The company saw its EBITDA loss has widened by 5.7% from $277 million in FY19 to $293 million in FY20.

“While COVID-19 has impacted the size of our business, it has accelerated our journey to profitability. In terms of the size of the business, COVID-19 has set us back by a year or so – but a year is only a small blip when you are building a company for the next 100 years,” wrote Goyal in a blog.

In the first quarter of FY21, with most restaurants being shut and operating on a takeaway only business, Zomato reported a revenue of $41 million and loss of $12 million.

In April, Zomato raised $5 million from Pacific Horizon Investment Trust. The fund is managed by British investment manager Baillie Gifford. In January, Zomato had raised $150 million from Ant Financial. But the round hasn’t been closed. Zomato is raising $600 million as announced by Goyal at an event in December 2019.

Zomato, which was supposed to get another tranche of investments from China’s Ant Financial, is in trouble because of India’s recent change in FDI policy, where any company sharing a border with India cannot invest directly in an Indian company.

The startup has also laid off 13% of its workforce and has also implemented permanent work from home for most employees to cut retail costs. “Our business has been severely affected by the COVID lockdowns. A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40% over the next 6-12 months. What actually happens, for better or worse, is anybody’s guess,” he wrote in an official blog.

However, the startup has enough money in its bank as Goyal wrote that they “have a very generous amount of runway in the bank”.


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