Zomato, the restaurant search and discovery service backed by Vy Capital, Info Edge, and Sequoia Capital, continues to be on an acquisition spree as a means to accelerate its international expansion.
After recently adding a presence in Central and Eastern Europe by means of two local acquisitions, the New Delhi-headquartered company, which now boasts a presence in 20 countries, has gobbled up Italy’s Cibando.
Terms of the acquisition remain undisclosed, though Zomato says all of Cibando’s team will be joining the company and will now lead its efforts to build out the service in Italy. This will include integrating Cibando into Zomato, thus transitioning its user base and traffic.
It also plans to scale up its teams in Rome and Milan to 30-40 full-time employees over the next three months, up from Cibando’s current headcount of 10.
Even longer term, Zomato says it will invest $6 million in its newly-acquired Italian operations over the next 2 years, growing the team to 150-200 people across the country’s top six cities.
That planned increase in headcount is probably a reflection of Zomato’s relatively labor-intensive business model, at least compared to other pure Internet plays.
To power part of its restaurant search and discovery engine, the company collects menus from restaurants and scans them using OCR. Its menu data is then re-checked in person by Zomato’s team every three months to ensure it stays relatively fresh, and it’s this “feet on the street” approach that attempts to differentiate the company from competitors, such as Yelp, IAC-owned Urbanspoon, Priceline-acquired OpenTable, and TripAdvisor.
Discussing today’s acquisition, Zomato co-founder Pankaj Chaddah tells me that Cibando is one of the largest restaurant search services in Italy and lists 82,000 restaurants across various cities.
“Their existing rich content base, traffic and user base will give us a great start as we launch Zomato in the country,” he says, noting that Yelp is the only other significant player in Italy. “We don’t see that as a threat – there are many other markets where we have entered after Yelp and are now bigger than them.”
Furthermore, Zomato’s appetite for buying up local players doesn’t show any signs of lessening. “We are currently in talks with 4 other players. There are always a lot of moving parts so can’t put a timeline for the next one,” adds Chaddah.
In November, the company closed a further $60 million in funding, giving it a post-money valuation of $660 million, and taking total funding to over $113 million.