Gurgaon-based Zomato Media Pvt Ltd, which owns the restaurant and event-listing site Zomato.com, has raised a fresh round of funding worth $50 million (Rs 311 crore). Info Edge (India), which held 50.1 per cent in the firm, has brought in half of the total to retain its majority shareholding, it said on Friday.
The firm did not disclose the name of the other investors. Email queries to both Info Edge and Zomato to ascertain if all the existing investors of Zomato pitched in, did not elicit a response.
Info Edge, which counts Zomato as a subsidiary even as the latter is run as an independent business, is a public listed internet business company. It is known primarily for its job search portal Naukri.com besides matrimonial venture Jeevansathi.com and real estate listing venture 99acres.com, among others.
99acres competes with the likes of MagicBricks, CommonFloor, Housing.com and PropTiger. PropTiger is part owned by News Corp. News Corp acquired the parent of this news website in March.
Meanwhile, the latest transaction takes Zomato’s total funding to over $163 million and comes barely five months after the firm attracted 370 crore ($60 million) in a new round led jointly by Info Edge (India) and Vy Capital, with participation from Sequoia Capital. That transaction also included purchase of shares from certain unnamed existing shareholders and valued Zomato at $660 million (post-money).
Zomato had earlier raised $53 million from Info Edge (India) and Sequoia Capital over multiple rounds of funding. Info Edge itself has put in around Rs 484 crore in Zomato to date.
Zomato has been actively expanding overseas both organically and through M&As. It has acquired as many as seven companies in the past one year. These acquisitions include MenuMania in New Zealand, Lunchtime (Czech Republic), Obedovat (Slovakia), Gastronauci (Poland), Cibando (Italy), Urbanspoon (US) and Mekanist (Turkey).
The largest of these was Urbanspoon, which also gave it an entry into the US market to face Yelp, the biggest player in the business. The firm acquired Urbanspoon for $52 million using bulk of the fresh money it got from the last funding round.
Indeed, Zomato was looking to raise as much as $100 million more.
Urbanspoon, which was part of NASDAQ-listed umbrella firm for various internet ventures IAC, has a presence in six countries, including the US, Canada, Ireland, the UK, Australia and New Zealand. It was a self funded venture before IAC snapped it in 2009.
Zomato’s presence rose over three-fold to over 500 cities against 150 before the Urbanspoon buy, with number of restaurants listed increasing to the same extent to over 1 million establishments. The bigger differentiator, however, was that the number of restaurant ratings rose around 9x to 43 million with the number of reviewers rising to over 1.4 million against 400,000 before the big buy in the US.
The venture is now looking to expand into related businesses and is trying to enable consumers to directly order food online through its site. This would pitch it against FoodPanda, a multi-geography food ordering venture incubated by German internet investor Rocket Internet. FoodPanda had recently acquired two key competitors in India, Just Eat’s Indian operations and TastyKhana (as part of a global deal). It is also heavily funded.
Zomato would need more cash to not just scale up its global operations and especially take on the might of NYSE-listed Yelp, it would also need a bucket load to build a serious online food ordering business either organically or through acquisitions.
That could be important for building new revenue streams for the firm. Zomato’s operating revenues for the year ended March 31, 2014, almost tripled to Rs 30.6 crore over the previous year. Its operating EBITDA loss, however, widened much faster to Rs 41.28 crore from Rs 10.03 crore in the same period. The firm’s annual financials for the year ended March 31, 2015 are not yet in the public domain.
Zomato was founded in 2008 by IIT Delhi alumni and ex-Bain employees Deepinder Goyal and Pankaj Chaddah. An online and mobile restaurant discovery service, Zomato provides information such as menus, directions, contact details, pictures and user reviews for over 1 million restaurants. The firm is present 20 countries and claims a user base of 35 million.
(Edited by Joby Puthuparampil Johnson)