You know the feeling: another long day at work, stomach growling, and no cooking energy. Traffic? Forget it. An hour in the kitchen? Not tonight! But hey, there’s your phone – a few taps and bam – dinner dreams come true! Indian street food, grandma’s comfort food, or that trendy fusion place you’ve been eyeing? The world’s delicious oysters are delivered piping hot to your door.
For many Indians, this is now a delicious reality. But how did we get here? How did a nation known for loving ghar ka khana (home-cooked food) embrace an app that delivers restaurant fare?
How it all started
Flashback to 2008, when ordering food seemed like an ordeal. Deepinder Goyal and his colleague Pankaj Chaddah, both IIT Delhi alumni, found themselves wasting precious lunch breaks deciphering menus and waiting for colleagues to decide.
This inefficiency fueled their entrepreneurial spirit. In 2008, their solution emerged – Foodiebay, a website that uploaded soft copies of restaurant menus, allowing users to browse and compare options at their leisure.
Office hack to citywide craze
Starting small, Foodiebay quickly gained traction within its office in Delhi. Its convenience spread like wildfire, attracting more users and prompting expansion to other major Indian cities like Mumbai and Kolkata.
As their user base grew, the founders recognized the need for a more user-friendly and catchy name. Facing brand limitations with “Foodiebay,” they brainstormed for two weeks to find a name reflecting their broader ambitions.
They craved a timeless, catchy name that avoided confusion with eBay. Ultimately, “Zomato,” a playful twist on “tomato,” became their new identity in 2010.
Mobile App Fuels Growth
The next hurdle was accessibility. Recognizing the growing smartphone revolution, the duo developed a mobile application, putting the power of food discovery and ordering at users’ fingertips. This move proved pivotal, skyrocketing Zomato’s popularity.
Spam Email to $1 Million First Funding
Believe it or not, Zomato’s first significant funding was a hilarious case of missed connections, and good luck! Deepinder, Zomato’s founder, almost ignored an email from Sanjeev Bikhchandani (the guy behind Naukri.com and founder of Info Edge). Deepinder mistook Sanjeev’s email for spam!
Deepinder overslept before their first meeting and accidentally bumped into another car on the way to the rescheduled one. Luckily, there were no injuries. Despite the chaos, the meeting with Sanjeev went well. Deepinder initially aimed for a $500,000 investment, but Sanjeev offered a cool $1 million!
The whole deal took just 8 minutes to finalize. Deepinder jokes that Sanjeev might have just been eager to leave after the car crash story! This lucky break turned a “worthless company” at the time, into the $19 billion giant it is today.
Initial Hurdles
Growth, however, wasn’t without its challenges. Goyal and Chaddah’s initial struggle was ensuring comprehensive restaurant coverage across major cities. They strived to offer users diverse options, not just popular chains.
Additionally, convincing established fast-food giants with their delivery networks to partner with it proved challenging.
The Winning Formula
Over time, the brand’s commitment to excellent service and user experience won over restaurants and customers.
Zomato’s model offered restaurants access to a wider customer base while streamlining their delivery operations.
Soon, established chains began to rely on Zomato’s extensive delivery network, further solidifying their position in the market.
Adapting and Overcoming
The road to success wasn’t always smooth. Accusations of unfair business practices, data breaches, and customer service issues arose. Swiggy, a fierce competitor, kept them on their toes.
Investor exits, and market fluctuations demanded constant adaptation. However, the duo’s leadership shone through. They addressed legal issues head-on, streamlined operations, and implemented customer-centric policies to overcome these hurdles.
Building a Food Ecosystem
Deepinder and Pankaj didn’t just weather the storms; they steered Zomato toward a constantly evolving business model. The platform transformed from a discovery tool to a comprehensive food ecosystem.
Zomato Pro (formerly Zomato Gold) offered loyalty programs and exclusive deals, while online table reservations further enhanced users’ dining experience. This constant innovation ensured that Zomato remained at the forefront of the food tech industry.
Investing for Growth
By 2011, the brand had established a strong presence in major Indian cities. Recognizing the global potential, the founders embarked on an international expansion journey, entering markets like the UAE, Sri Lanka, and the UK.
Both of them understood the importance of expanding Zomato’s reach and capabilities. They invested in companies like Blinkit, UrbanPiper, Shiprocket, and Cult. Fit throughout their journey.
These strategic moves diversified the offerings and helped Zomato build a more robust ecosystem.
From Local Hero to Global Player
A landmark acquisition for Zomato was Urbanspoon in 2015, which allowed them to enter the US market. They acquired 15 other companies, including Uber Eats India, Runnr, and FITSO, and nearly $3 billion was raised over numerous funding rounds.
Layoffs in 2015 marked the era for Zomato as it grappled with falling revenues. However, buying MapleOS boosted their directory and added features like online reservations. After a slow 2016 with more revenue losses, they streamlined operations, remotely managing presence in 9 countries to stay competitive.
The company claimed it was profitable in all 24 countries it served by 2017, processing over 3 million orders a month and delivering its 1 billionth order in 2021, solidifying Zomato’s position as a leading global food delivery industry player.
Shifting of Roles
In May 2018, after ten years as Goyal’s “conscience keeper and a support system during upheavals,” Pankaj Chaddah decided to move on.
He founded Shyft (formerly Mindhouse), while Zomato promoted Aakriti Chopra, one of their early employees and wife of Blinkit’s chief Albinder Dhindsa, to Co-founder.
Zomato Hits Refresh!
Undeterred by leadership shifts, they diversified beyond food delivery.
Zomato Wings – To connect restaurants with investors, fueling culinary growth.
Zomato AI – To personalize food discovery with AI-powered recommendations.
Zomato Future Foundation – To invest in delivery partners’ children’s education.
Zomato Hyperpure – To ensure fresh ingredients for restaurants through direct sourcing.
Zomaland – An offline food carnival brings Zomato Collections to life.
Xtreme – A new parcel delivery app that expands revenue streams.
Innovation & Engagement
Zomato’s marketing efforts have also been noteworthy. Their clever slogans and creative campaigns, like the #zomatoloot campaign, have resonated with audiences, showcasing their ability to engage beyond just food delivery.
Zomato Eyes the Future
Looking ahead, Zomato is poised for further expansion. Goyal plans to leverage their extensive network to enter the large-order catering industry, catering to events and corporate functions.
Additionally, his recent investment in quick commerce platform Blinkit highlights his focus on diversifying his offerings and exploring new avenues in the ever-evolving food tech landscape.
Finding Fortune via Food
Today, Zomato is valued at $19.14 billion and has delivered over 647 million orders. With a presence in over 800 cities, Zomato’s story is just beginning.
Zomato’s revenue continued to rise in Q4 FY2024, surging over 70% year-over-year, reaching ₹3797 cr from ₹2227 cr. They turned profitable, reporting a net income of ₹175 crore from a loss of ₹188 cr in Q4 FY2023, an increase of 193.09%.
Their IPO in July 2023 was a hit. The stock price opened significantly at ₹116, a 52.63% premium to its offer price of ₹76, reflecting strong investor confidence.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.