Zomato

Zomato is an Indian restaurant aggregator and food delivery start up founded in 2008. It was started by Deepinder Goyal and Pankaj Chaddah. It provides information, menus and user-reviews of restaurants, and also has food delivery options from partner restaurants in select cities. As of 2019, the service is available in 24 countries and in 10,000+ cities.[3]

Zomato
Screenshot
The big Zomato homepage in Greater Vancouver
Type of businessPrivate
Available inEnglish, Turkish, Portuguese, Indonesian, Spanish, Czech, Slovak, Polish, Italian, Vietnamese
FoundedJuly 2008 (2008-07)
HeadquartersDLF Phase V, Gurugram, Haryana, India
Area served24 countries: Australia, Brazil, Canada, Chile, Czech Republic, India, Indonesia, Ireland, Italy, Lebanon, Malaysia, New Zealand, Philippines, Poland, Portugal, Qatar, Singapore, Slovakia, South Africa, Sri Lanka, Turkey, UAE, United Kingdom, United States
Founder(s)Deepinder Goyal, Pankaj Chaddah[1]
Key people
  • Deepinder Goyal (Founder and CEO)
  • Gaurav Gupta (Co-Founder & COO)
  • Mohit Gupta (CEO-Food Delivery business)
  • Gunjan Patidar (Head of Engineering)
  • Akriti Chopra (CFO)
IndustryConsumer Services
ServicesRestaurant Search & Discovery, Online Ordering, Table Reservations & Management, POS Systems, Subscription Services
Employees5,000+
WebsiteZomato
Alexa rank963[2]
AdvertisingYes
RegistrationOptional
Users8 crore (80 million) monthly active users
Current statusActive
Native client(s) onWindows Phone, iOS, Android, Universal Windows Platform (Windows 10 Mobile, Windows 10)

History

Zomato was founded as Foodiebay in 2008. It was renamed Zomato in 2010.[4] In 2011, Zomato expanded across India to Delhi NCR, Mumbai, Bangalore, Chennai, Pune and Kolkata.[5] Subsequently, in 2012, the company expanded operations internationally in several countries like the United Arab Emirates, Sri Lanka,[6] Qatar,[7] the United Kingdom,[8] the Philippines, and South Africa.[9] In 2013, Zomato was launched in New Zealand,[10] Turkey, Brazil and Indonesia, with its website and apps available in Turkish, Brazilian Portuguese, Indonesian and English languages.[11] Further in April 2014, Zomato launched its services in Portugal, followed by launches in Canada, Lebanon and Ireland in the same year.[12][13][14]

The acquisition of Seattle-based food portal Urbanspoon marked the firm's entry into the United States, Canada and Australia, and brought it into direct competition with Yelp, Zagat and OpenTable.[15]

With the introduction of .xxx domains in 2011, Zomato also launched zomato.xxx, a site dedicated to food porn.[16] It later launched a print version of the website content named "Citibank Zomato Restaurant Guide" in collaboration with Citibank in May 2012, but it has since been discontinued.[17]

With its cloud kitchen, the company aimed to help restaurants to expand their presence without incurring any fixed costs.[18] Later in September 2017, Zomato claimed that the company had "turned profitable" in the 24 countries operated in and announced that the "zero commission model" to be introduced for partner restaurants.[19] Towards the end of 2017, Zomato stopped accepting updates from its active users by not utilising moderators to verify and make updates. Restaurant information was not updated. Users of the app reported issues with new features to pay for orders.

Zomato narrowed down its losses by 34% to ₹389 Cr for the financial year 2016–17, from ₹590.1 Cr crore in the previous year 2015-16.[20][21]

In September 2019, Zomato fired the highest number (541 people) of employees almost 10% of workforce working on back end activities like customer service, merchant and delivery partner support functions.[22]

Investments

Between 2010-13, Zomato raised approximately US$16.7 million from Info Edge India, giving them a 57.9% stake in Zomato.[23][24][25] In November 2013, it raised an additional US$37 million from Sequoia Capital and Info Edge India.[26]

In November 2014, Zomato completed another round of funding of US$60 million at a post-money valuation of ~US$660 million. This round of funding was being led jointly by Info Edge India and Vy Capital, with participation from Sequoia Capital.[27]

While in April 2015, Info Edge India, Vy Capital and Sequoia Capital led another round of funding for US$50 million.[28] This was followed by another US$60 million funding led by Temasek, a Singapore government-owned investment company, along with Vy Capital in September.[29]

In October 2018, Zomato raised $210 million from Alibaba's payment affiliate Ant Financial. Ant Financial received an ownership stake of over 10% of the company as part of the round, which valued Zomato at around $2 billion. Zomato had also raised an additional $150 million also from Ant Financial earlier in 2018.[30]

Acquisitions

Zomato has acquired 12 startups globally.[31] In July 2014, Zomato made its first acquisition by buying Menu-mania for an undisclosed sum.[32] The company pursued other acquisitions such as lunchtime.cz and obedovat.sk for a combined US$3.25 million.[33] In September 2014, Zomato acquired Poland-based restaurant search service Gastronauci for an undisclosed sum.[34] Three months later, it acquired Italian restaurant search service Cibando.[35]

Zomato also acquired Seattle-based food portal Urbanspoon for an estimated $60 million in 2015.[36] Other acquisitions of 2015 include Mekanist in an all-cash deal,[37] the Delhi-based startup MapleGraph that built MaplePOS (renamed as Zomato Base,[38] and NexTable, a US-based table reservation and restaurant management platform.)[39]

In 2016, the company acquired Sparse Labs, a logistics technology startup[40] and the food delivery startup, Runnr, in 2017.[41]

While in September 2018, Zomato acquired Bengaluru-based food e-marketplace TongueStun Food for about $18 million in a cash and stock deal.[42] Later in December 2018, Zomato acquired Lucknow-based startup TechEagle Innovations, that works exclusively on drones, for an undisclosed amount.[43] Zomato claimed that the acquisition will help pave the way towards drone-based food delivery in India, building a technology aimed at hub to hub delivery network.[44]

Security breaches

On 4 June 2015, an Indian security researcher hacked the Zomato website and gained access to information about 62.5 million users. Using the vulnerability, he was able to access personal data of users such as telephone numbers, email addresses and Instagram private photos using their Instagram access token. Zomato fixed the issue within 48 hours of it becoming apparent.[45] On 15 October 2015, Zomato changed business strategies from a Full-Stack market to an Enterprise market. This led Zomato to reduce its workforce by 10%, or around 300 people.[46]

On 18 May 2017, a security blog called Hackread claimed over 17 million accounts had been breached. "The database includes emails and password hashes of Zomato users, while the price was set for the whole package is $1,001.43 (Bitcoins 0.5587). The vendor also shared a trove of sample data to prove it is legit", the Hackread's post said. Hackread claimed details of 17 million users had meanwhile been sold on the Dark Web. Zomato confirmed that names, email addresses and encrypted passwords were taken from its database. The company reassured affected customers that no payment information or credit card details were stolen.

Zomato said the security measures it uses to ensure the stolen passwords cannot be converted back into normal text, but it still urged users who use the same password on other services to change them. It also logged the affected users out of the app and reset their passwords. "So far, it looks like an internal (human) security breach - some employee's development account got compromised", the company said in a blog post but later, when Zomato contacted the hacker, they discovered a loophole in their security. The hacker removed the stolen content from Dark Web asking for a healthy bug bounty programme.[47]

Controversies

Food has no religion tweet

Food doesn't have a religion. It is a religion. Zomato, on Twitter, [48]

In July 2019, Zomato received a Hindu customer's complaint that he was assigned a non-Hindu delivery boy for his food order in Jabalpur and had asked Zomato to provide a Hindu delivery boy. The customer alleged that Zomato had refused to change the rider after which he asked to cancel the order.[49] The customer then posted this incident on social media site, Twitter after which Zomato responded to the message stating: "Food doesn't have a religion. It is a religion.", as a twitter response. It received praises on social media including support from rival Uber Eats, politicians P Chidambaram and Omar Abdullah, actors Richa Chadha and Swara Bhaskar.[49][50][51] However, some social media users criticized it on social media for using Jain food and halal tags on food items to which the company issued a clarification that these tags were put by restaurant owners and not by Zomato.[52]

After this incident, the customer who complained against Zomato deleted his tweet. He was issued a notice for his hate tweets from Superintendent of Police of Jabalpur,[49] for "violating the constitutional provisions where there is no place for any kind of untouchability and acts disturbing religious harmony". The police had taken suo motu action on the news of the incident.[53] The customer signed a legal bond (under Code of Criminal Procedure (CrPC), 1973, under Section 107/116) to not indulge in any activity that breaches peace, was placed under police surveillance for six months, and agreed to be placed into custody if he violates his promise.[54] Zomato CEO had instructed his team members "not to succumb to any demands of a customer, partner, or even an employee on racial grounds or grounds of any form of diversity".[53]

On 11 August 2019, Zomato delivery executives in Kolkata, led by Sanjiv Kumar Shukla, a Bharatiya Janata Party leader, protested against the company for forcing them to deliver beef and pork after their denial and request of not to do so for religious reasons.[48][55] Hindu and Muslim delivery executives of company went on an indefinite strike.[56] The BJP leader later admitted that the strike was in response to Zomato's "food has no religion" tweet.[48] CEO Deepinder Goyal clarified that there was not a single order of pork in that entire area, only a single order of beef and even that order was cancelled before delivery.[48]

Logout campaign

On 17 August 2019, more than 1,200 restaurants logged off from Zomato because of their offer of discount programmes at dine-in restaurants.[57][58] In Pune alone, more than 450 restaurants stopped serving to Zomato Gold because of aggressive discounts and loss of business.[59] However, Zomato founder Goyal admitted mistake, became ready to rectify it and called for sanity and truce.[60][61] He also urged restaurants to stop #Logout campaign.[62][63]

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