Zomato, the restaurant search and discovery service, has closed a further $60 million in funding, giving the company a post-money valuation of $660 million. Investment comes from India’s Vy Capital, and existing backers Info Edge, and Sequoia Capital. It takes total funding to over $113 million.
“We will use the funding to go into hyper-drive on our key focus — driving leadership across more markets,” Zomato co-founder Pankaj Chaddah tells me. “We will also use a large part of this round to go after some key strategic acquisitions which will help us strengthen our market share across various countries.”
In addition, he says there are a number of “innovative” products in the pipeline, while the new funding round will help speed up development and scale these new products faster. “Overall, this raise enables us to be much more aggressive with every initiative we take – it gives us more room to try harder and fail faster,” adds Chaddah.
Founded in 2008, New Delhi-headquartered Zomato began as a menu card scanning service in India, sending people out to collect menus from restaurants and then scanning them using OCR. It’s this “feet on the street” approach that attempts to differentiate the company from competitors, which include Yelp, IAC-owned Urbanspoon, Priceline-acquired OpenTable, and TripAdvisor.
In addition to restaurant and menu data, Zomato’s web and mobile apps offer various social features — including the ability to follow other users’ activity and write and read reviews — as well as letting you search for restaurants by location, dish and offering up other granular info like opening hours and services offered e.g. take-away, dine-in, and home delivery. The iOS app was recently updated, adding ‘draw-on-a-map’ and ‘plan your day’ features.
Of note, Zomato’s menu data is re-checked in person by Zomato’s team every three months to ensure it stays relatively fresh, which is obviously more labour intensive and less scalable than a purely online data play. The company currently employs around 900 people, the majority of which work on content.
It makes money via native advertising, something only recently implemented in its mobile apps, which now account for over half of traffic. Zomato claims 30 million visits across its web and mobile platforms every month.
The company also recently launched ‘Zomato for Business’, an app built to help restaurants engage with customers and drive more business.
Meanwhile, although India remains its strongest market, Zomato’s restaurant search and discovery service now spans over 100 cities in 18 counties, most recently adding a presence in Central and Eastern Europe by means of two local acquisitions. In late August, it gobbled up the Czech Republic’s Lunchtime.cz and Slovakia’s Obedovat.sk — the leading restaurant guides in their respective countries — for a combined $3.25 million.
At the time, Chaddah told me that Zomato was planning to expand to a further ten or so countries in the coming months, but said expansion to the U.S. wouldn’t take place until “the second half of 2015” and was reliant on the company raising another round, which, of course, has now happened.
Asked the U.S. expansion question again, Chaddah tells me that there are a number “variables” to take into consideration. “One of them is that the potential of the untapped markets outside the U.S. is humungous and so is the opportunity in the U.S.,” he says. “We are currently thinking actively about this. If the planetary alignment is right, it might happen in the next three months. If we run out of luck, it might not even happen in 2015. But second half of 2015 seems reasonable to commit to right now.”
Adds Chaddah: “We are entering Malaysia and Ireland in the next quarter and are looking at more markets in Europe and South East Asia. We are looking at launching Australia very soon as well.”