As Zomato Gold numbers swelled, restaurants had to foot the bill for higher valuation

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Published: August 30, 2019 12:27:55 PM

Via Gold program, the Deepinder Goyal-founded company’s revenue-generating users shot up and the same was reflected in fund-raising rounds.

Zomato, Zomato restaurant, Zomato news, NRAI, industry news, Deepinder Goyal, Zomato gold, Zomato  india, Zomato  offerSeveral thousands of restaurants recently logged out of the platform, blaming Zomato Gold for being unsustainable for them.

Zomato’s Gold, the paid membership program for dining out, has helped the online food aggregator to raise $400 million in funds, a whopping 60% of the amount raised since Zomato was incepted. However, the same has come from the pockets of restaurants which bore the additional costs while Zomato rode high on Gold, The Indian Express reported. Via Gold program, the Deepinder Goyal-founded company’s revenue-generating users shot up and the same was reflected in fund-raising rounds.

The way Gold panned out was not in accordance with initial plans, according to restaurant owners. While only 5,000 to 10,000 users were initially planned for Gold, Zomato now has over 13 lakh Gold subscribers causing the restaurants to run their businesses with “deep discounts”. Further, Zomato also added to its revenues by charging Rs 40,000 from the restaurants to add them to the platform, as claimed by restaurateurs. The amount was then raised to Rs 75,000, the newspaper reported.

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Several thousands of restaurants recently logged out of the platform, claiming that Zomato Gold was unsustainable for them. Since then, Zomato has tried to reconcile with restaurateurs by tweaking the Gold program and limiting the benefits extended to users. Zomato has promised the restaurants that the company will raise the fee for Gold to Rs 1,800, ensuring only premium users for the restaurants. The food aggregator also said that the restaurants which have logged out of the platform but decide to join before a certain date, won’t be charged membership charges again. The company also acknowledged “mistakes” on its part and said that the logging off campaign was “a wake-up call”, Zomato founder Deepinder Goyal said in a series of tweets recently.

Meanwhile, the National Restaurant Association of India (NRAI), which has united the industry, has approached the Competition Commission of India with the issue and has asked the authority to conduct a study on the “deep discounts”. The findings of the study are due any day. Till then, the fight between restaurants and the food aggregator ensues.

 

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