In the exam of life, those will only succeed who have new creative ideas and think one step ahead of others. To succeed you must not be afraid of working hard and losing.
Food is the prime mover for anyone across the globe. Of course, many people yearn for food and to taste a variety of available cuisines. The furtherance in the technology has paved a way for the creation of many innovations and it is no less to mention that food delivery app development is one among them.
In this extravagantly ornate system, it has become hard for every person to distribute time on everything. Besides, cooking food after a busy day entails a lot of time and that is what has gained huge rage about these food delivering applications, where food will be delivered directly at your doorsteps.
For all these ingenious thoughts, there are those unusual people who have a perfect understanding of all the trends and so are these people Pankaj Chaddah and Deepinder Goyal. They are the master brains behind this great food delivery application ‘Zomato’. Zomato has been and is the most widely used ordering application that attracted many customers with its innovative strategies.
Foodiebay is the way it all started
Deepinder Goyal and Pankaj Chaddah graduated from IIT Delhi. In 2008, they worked at Bain & Co in New Delhi when they came up with the idea of Foodiebay, later changed to Zomato. In their office, they came across many people waiting for a long time just to acquire a flash of the menu card. After brainstorming for some time, the idea of Foodiebay came into their minds.
Foodiebay scanned the menus of restaurants and posted them on the company’s private website. Soon, the employees of Bains started using the website and thus saving their time. This, in turn, increased the traffic to their website. Eventually, they decided to expand their website to make it accessible for everyone. In a matter of nine months, FoodieBay became the largest restaurant directory in Delhi NCR. Soon, its services were extended to Mumbai and Kolkata.
The number of customers using the application kept on increasing with every passing year. Foodiebay acquired huge popularity as it was rendering peculiar services to the customers. This has enabled Goyal and Chaddah to scale the project to an international level.
Foodiebay was officially changed to ‘Zomato’
In 2010, Foodiebay was officially changed to ‘Zomato’ and there was no looking back. The website of Zomato started getting steady traffic over a period which promoted founders for innovation. After the traffic started to grow, Zomato looked to build more easy access to browse a website. Innovation comes at a cost, and Zomato needed funds to build a mobile application. A mobile application was the need of the hour for Zomato, to give easy access to customers but Zomato did not have enough funds.
Did you know the food delivery Zomato app’s Tagline is “Never have a bad meal”
Challenges faced by the Zomato company
- Zomato faced numerous serious challenges that were “make or break” situations for the team. 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.
- In the same year, in the States, Zomato had acquired Urbanspoon and rebranded the company as their own. Unfortunately, the rebranding did not come out as expected and the venture failed miserably.
- 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.
- Then came the year when Zomato’s existence went at stake when in 2017, it faced its biggest cyberattack with a hacker that had breached 17 million user records from the company database. While its concerns were overpayment and user card & 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.
- In 2019, the #A logout campaign surfaced when the restaurants listed on the portal called out on it for eating into their profit margins through Zomato Gold and Infinity Dining features, a Zomato feature that provided heavy discounts.
Zomato needed funding from the investors and that’s when Sanjeev Bikhchandani of Naukri.com Stepped on. Sanjeev was fascinated with the idea of Zomato and he invested up to US$ 1 million through Info Edge (India). In 2011, Zomato received a huge fund of US$ 3.5 million through the same investors.
Info Edge (India) continued to invest in Zomato in the coming years also, it invested US$ 10 million in the year 2012. Investment has come from all quarters to Zomato, companies like Sequoia Capital, Vy Capital, and Temasek have also invested in Zomato. Info Edge (India) holds the majority of shares of Zomato.
The company quickly rose to success and started expanding. By 2012, Zomato extended its services to Sri Lanka, UAE, Qatar, South Africa, the UK, and the Philippines. In the year 2013, New Zealand, Turkey, and Brazil were added to the list. During this time, Zomato also worked on its mobile app to match the boom in the smartphone trend and launched its app.
In 2014, Zomato acquired Gastronauci, Poland’s restaurant search service, and Cibando, an Italian restaurant finder. The next year, Zomato made its biggest acquisition — US-based online table reservation platform NexTable. But, like any other startup, Zomato also faced hurdles on its journey to the top.
Deepinder tweeted on the exit of his co-founder, thanking him for the amazing journey they spent together. Here goes his Tweet:
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. 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.
- 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.
- Zomato launched Zomato Wings, a platform that is designed to connect investors with the restaurants.
“We hope to build the go-to platform for venture capital firms, angel investors, family offices, etc. that are looking to make private investments in restaurants and cloud-kitchens,” Zomato CEO Deepinder Goyal mentioned in a blog.
First Mover Advantage enjoyed by Zomato
Zomato was undoubtedly the first player in the industry to unveil the concept of online restaurant discovery in India. Needless to say, it established a quick connection with the consumers, with the help of various unique marketing and brand-building initiatives that it undertook. Usually, the first players in the industry win half the battle easily, as they are quick in earning a name for themselves. This first-mover advantage helped Zomato sail through and rise irrepressibly.
Robust Business Model
Zomato carved a unique, profitable business model for itself right from the beginning, which helped them sail through even during tough times, including the period of 2015-2016, when the startup was experiencing significant losses. Today, Zomato has multiple revenue channels including restaurants listing/ advertising, food delivery, subscription programs, live events, White Label access, Zomato kitchens, and Zomato Gold. It is continuing to work on many new business endeavors, with an aim to sustain profitability.
Zomato Success Story is not built on one pillar, they created a business model which played its part in building the brand of Zomato. It also faced numerous challenges when it was starting. The main challenge for the founders was to list restaurants of all the important places of cities where people were likely to visit. Zomato hired a team that would visit the cities and list the restaurants. It was hard at the initial stages but as the squad members grew, Zomato was able to operate the situation better. Now, Zomato is Asia’s Largest Restaurants Guide.
