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We have come across many news pieces where companies faced severe problems while running their business. The obstacles even reached an extent in which many had to shut their business forever.
But, not everyone had to go through the same traumatic phase during this time of crisis. Take the example of Zomato. Right after the world hit this neverending pandemic, this food delivery app reached new heights.
Food is a driving force for many. It does come under one of the most basic amenities for a human being.
And when it comes to a country as busy as India in its peak lunch hours, getting a glance at the menu card before ordering food is also a huge problem.
Deepinder Goyal and Pankaj Chaddah came up with the perfect solution to waiting in long queues for food.
And after 13 years of its foundation, Zomato has released its IPO, hoping to raise Rs.9,375 crore.
Let’s have a look at how Zomato was founded.
To begin the journey on the road to success, it requires an idea that would set things apart.
The story of Zomato started in the office of Bain & Company in Delhi. Deepinder and Pankaj were colleagues at the company when they came up with FOODIEBAY, a prologue to Zomato.
They saw people standing in a queue at lunchtime and waiting for their chance to order. There, they got the idea of Foodiebay.
Their idea germinated in the form of Foodiebay.com; they put up scanned copies of the food court menu onto their company’s private network. Everyone at the company soon started using this service, and there was a sudden surge in website traffic.
They began listing restaurants from Delhi-NCR on their portal and quickly expanded to other cities like Kolkata and Mumbai.
By now, this wasn’t just confined to the walls of their office. Everyone else around their vicinity also started using these scanned copies. The first professional restaurant menu that Deepinder and Pankaj uploaded onto their site was that of Hauz Khas in Delhi.
After this, they started expanding this idea into other metropolitan cities of the country, including Kolkata, Mumbai, and Bangalore.
After getting a massive surge in their traffic, they decided to modify it and take it international, and in November 2010, they changed the name Foodiebay to Zomato.
And once the word was around, thousands of people started using their website to get to know about the best restaurants around.
This interest from people around encouraged Pankaj and Deepinder to think of going PAN India. This was when the idea of renaming the site came into their minds.
They wanted something with more of a punch and something easier to remember, and hence came the word ZOMATO in November 2010.
The founders wanted to make life a little easier for their users, and hence came the idea of building a mobile application. With this growth in their business and their ideas arose a need for funding.
Sanjeev Bikhchandani, the founder of Naukri.com, got impressed with this idea of Deepinder and Pankaj.
In December 2010, Sanjeev Bikhchandani provided Zomato with a funding of 1 million USD through his company Info Edge India, and after that, there was no looking back.
In the next round of funding, they got funding of 3.5 million USD from Info Edge India. In 2013, Zomato received a staggering 10 million USD from Info Edge India, making Info Edge India a holder of nearly 50% of the shares in the start-up.
Other investors for Zomato include Sequoia Capital, VY Capital, and Temasek. The funds just kept coming in after this.
In September 2012, Zomato launched its services in Dubai, Sri Lanka, United Kingdom, South Africa, Turkey, and New Zealand.
And by the end of 2018, it is estimated that Zomato would’ve received funding of more than 300 million USD.
This funding gave Zomato expansion into more cities across India apart from Delhi, Bangalore, Kolkata, Mumbai, Hyderabad, Ahmedabad, Pune, Chennai etc.
In 2020, Zomato raised $660 Million in the funding of Series J round led by Kora, Tiger Global Management, hitting Zomato's Valuation to $3.9 Billion.
And on 14 July 2021, Zomato opened its IPO at the initial price band of Rs. 72 - 76.
The Zomato IPO opened on July 14, 2021, and it closed on July 16, 2021. And the finalisation of the Basis of Allotment for Zomato IPO will be done on Jul 22, 2021.
Zomato hoping to raise Rs 9,375 crore, marks an increase from the previously announced Rs 8,250 crore when it filed draft documents with market regulator SEBI in April.
It has set a price band of Rs 72–76 per share. Bids can be made for a minimum of 195 equity shares and in multiples of 195 after that.
Of the total offer size, shares worth Rs 9,000 crore are fresh issues, while the remaining is an offer for sale by Info Edge India Ltd.
Zomato has marked its name as the acquisition king amongst industry leaders, and it has also proved that a start-up can become an acquisition king.Till now, Zomato has made 15 acquisitions:
Zomato is India’s first-ever international application.
Currently, there are over 100 million Zomato users worldwide. People use the application to get the best food in whatever place possible.
As of December 2020, Zomato had nearly 162,000 active delivery drivers and 350,000 active restaurant listed on their platform. And at the end of 2020, Zomato had 1.4 million premium customer subscribers and 25,350 Pro Restaurant Partners in the Indian market.
Big restaurants worldwide post their advertisements on the Zomato app, an added advantage, which is basically how Zomato makes its money.
Another form of income for them is selling tickets for food festivals that they partner with or sponsor.
Not to forget the hardships that Deepinder and Pankaj have had to face in their quest to the top of the mountain. Since the whole plan from the start of this business was to reach out to each street in every city to provide the best services to its users, there have been multiple ups and downs.
Zomato’s services in the cities of Kochi, Coimbatore, Lucknow and Indore are currently suspended because their markets weren’t ready for this level of business.
These slight downfalls have, however, never disheartened either Deepinder or Pankaj.
Zomato proudly boasts over 1.5 million restaurants on its database, and they don’t seem like they want to stop at this and one day hope to be at power with global players present across the world.
Both Deepinder and Pankaj left no stone unturned, which is why Zomato continuing to climb up the ladder of success.
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