2. Deepinder Goyal
Pankaj Chadda
Deepender Goyal is from
Punjab and happens to be a
lover of food.
Went to IIT Delhi (2005)
Mathematics and Computing degree
Got into Bain & Company & Worked as
Consultant & Senior Consultant (2005-2009)
It was at Bain that Deepinder conceived the idea of an online restaurant
information service after seeing the demand for menu cards among his colleagues
3. Idea Creation
When he was Working in
Bain & Company, He Saw
long Queue in Pantry
everyday to look the menu
to order food
They Started Online site called
foodiebay.com in 2008
from Gurgaon
Problem
Idea
User can get in-depth
Information about
Restaurants, menu cards,
contact details, pictures,
directions, rating and
reviews
Services
Initial Offering to users
in 2011
This creates a highly
targeted platform for
restaurant owners to market
their product to customers
who are looking for meal
options and this forms the
key revenue generator for
Zomato
Business
Model
He got the Idea, What if we
could access these Menu
Cards Online ?
4. • Investment in food startups, which mainly include
food ordering apps, has increased by 93 percent to
$130.3 million, comprising 17 deals till September
2015, as against only five deals in 2014.
• Zomato has been showing a growing trend in
revenues and grew by 83 percent to Rs 7,883.57 lakh
in FY 2014-15 from Rs 3,060.28 lakh in the previous
year.
Financials (Sector, Valuations):
• HSBC Securities and Capital Markets (India) Pvt. Ltd
has slashed Zomato valuations by half, to $500
million. Last capital raised by Zomato in 2015 from
Temasek Holdings Pte and Vy Capital, was at a
valuation of a $1 billion.
• Reserves and surplus are at Rs 66,172.54 lakh, giving
a sound financial cushion to the company.
490
895
0
100
200
300
400
500
600
700
800
900
1000
2013 2020
Indian Food retail
market (USD billions)
76%
24%
24%
Online food delivery business in India
Online food ordering orgainsed sector (USD 33 bn)
Food delivery (USD 15 bn)
6. Type A Orders Type B Orders
Parameter
Restaurants delivers
by itself - Zomato
transmits the order,
and acts as a personal
concierge for the user
in the case of
failures/problems
Zomato's delivery partners
deliver on behalf of the
restaurant. The restaurant
ties up with Zomato
delivery and Zomato works
with Delhivery or Grab to
fulfill the order.
AOV (INR) 480 375
Percentage of orders 80% 20%
Take rate
(commission)
8.20% 8.20%
Delivery Fee NA 10%
Gross Revenues for
Zomato
39.4 68.30%
Delivery Fee paid to
partners
0 50
Processing/Support
Cost (INR)
18.4 27.4
Net Revenue per
order for Zomato
(INR)
21 -9.1
Orders processed in May
2016
750,000
Growth of orders processed
month over month
30%
No. of restaurants where
Zomato listed
42,000
No. of cities & countries
(operational)
12 & 23
Financials (Margins, operations)
Zomato acquired
Sparse Labs (real
time based GPS
tracking system)
and renamed it as
Zomato Trace.
7. How it panned out?
• Miscalculated Acquisition of Urbanspoon to increase its market share but found itself facing an
increasing number of competitors
• Due to its descend into the new market, it opened itself to new competitors
• Scaling too Fast: Due to its major focus on rapid growth, it threatened its own USP
• Adding more services to its portfolio meant targeting a wide range of customer segments, but this
lost major customers as it focused its resources towards new customers while loosing its existing
loyal customers
• Primary focus on its existing services in order to maintain its USP would have helped
• In order to expand, it should have done it without redirecting most of its resources towards new
additional services especially when they were in the testing phase
• Markets should have been allowed to mature and hit break-even before the intensive expansion
What could have been done differently?
8. How it panned out?
• Inefficient Data Protection Standards: Customer Data was not secure and it resulted in revealing
17 million user IDs and passwords
• Incorrect Assessment of the Market: Due to poor demand, Zomato shut its operations in Lucknow,
Kochi, Indore, and Coimbatore
What could have been done differently?
• Investment in more stringent data security protocols could have helped in maintaining their image
of a customer-friendly service
• Venturing into Tier-2 cities could have been avoided through accurate market research and sound
decision-making
