Restaurant search portal Zomato has been on an expansion spree since 2014, having announced five acquisitions in Italy, New Zealand, the Czech Republic, Slovakia and Poland last year. Its latest buy of Seattle-based Urbanspoon for $52 million, marks its foray into the lucrative US market, where it will be pitched against market leader Yelp, besides Australia and Canada. Zomato plans to invest another $50 million to grow its US business. The six-year-old company, which has so far raised $113 million, including a $60-million round last November, is reportedly in talks to raise $100 million more to fuel growth. Co-founder and COO Pankaj Chaddha tells FE’s Sayan Chakraborty about Zomato’s plans to beat Yelp and expand to newer geographies in the days to come.
Why did Zomato choose to enter the US, despite it being one of the biggest markets?
The US launch has been on the cards for some time now, and acquiring Urbanspoon gives us a solid foundation to build on. Considering Urbanspoon’s market leadership and the solid foundation of rich local content they’ve built over the years, we felt it was the perfect way to enter the US market.
How does Zomato plan to differentiate itself from the likes of Yelp?
Data on Zomato is highly curated, and provides detailed restaurant information across numerous data points. Our data is refreshed every three months, which makes it more up-to-date and relevant. We believe that diners are looking for different ways to find and experience restaurants, and we think that there is ample opportunity for Zomato to offer an alternative and, in some ways, better experience than Yelp.
What traction will Zomato gain with Urbanspoon acquisition?
Urbanspoon is one of the market leaders in the US. One of our dominant large-market entry strategies has been acquiring strong players in the market. Urbanspoon has a huge following of mobile and web users who are as passionate about food as we are. The acquisition strengthens our market share across countries where Urbanspoon has a strong foothold, including the US, Australia, Canada and the UK. Our restaurant coverage will increase from over 300,000 to more than a million across the globe. Zomato’s traffic will more than double from about 35 million visits per month to more than 80 million visits per month, probably making it the largest restaurant search company in the world.
How does Zomato see 2015 unfolding in terms of business growth, entering new geographies, etc?
2015 will see us continuing our expansion to newer geographies across the world, while also maintaining a strong focus on existing markets and innovating our product to take it to the next level. The Urbanspoon acquisition and our launch in the US and Australia is going to change the game for us and we can’t wait to sink our teeth into all that 2015 hold for us.
Will Zomato look at the inorganic growth only for new geographies? What will your acquisition strategy this year?
If there are great local products whose vision matches ours, and we see value in combining our products, we are open to exploring the option. One of our dominant large-market entry strategies has been acquiring strong players in the market. If there is no existing local player we can approach the acquisition route with, we will enter the market using our feet-on-street model of collecting data.
Will Zomato alter its revenue model?
Our revenue model is primarily centered around our hyper-local advertising model. We’re also going to be rolling out the Zomato Cashless payment system, which we will start off with in Dubai.