School of Management

NATIONAL INSTITUTE OF TECHNOLOGY

WARANGAL
School of Management

A Report on
“Business analysis of ZOMATO” For International Business.
Submitted by MBA 1st year
AKANKHYA PANDA (188904)
AVANTIKA SHARMA (188909)
SUNIL (188915)

HARIPRASAD (188920)
TEJASWI (188925)

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TABLE OF CONTENTS

Introduction 3

Profile 4

Financial Analysis 8

Capital & Investment 14

Trade 17

Financial Position 19

Market Position 22

Future Development 26

Conclusion 29

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 INTRODUCTION

Zomato is an online discovery guide for restaurants, bars, pubs and clubs and for dine-outs. The
registered users are required to post reviews and rate (on a scale of 1 – 5 stars) the restaurants on the basis
of their choice, visit and experience. The website helps in defining the restaurant/pub/club on the basis of
presence or absence of air conditioning, smoking area, Wi-Fi Internet, stag entry, live performances and
outdoors eating or whether non-vegetarian food and alcohol are served or not. Zomato also provides
information related to cuisines served, operation timings, approximate cost of a meal for two, credit-cards
accepted or not.

PROFILE

Origins of ZOMATO

Zomato started as the website Foodiebay.com, by Deepinder Goyal, a post-graduate from IIT Delhi.
Foodiebay officially started in July 2008 with a list of 1,200 restaurants in the Delhi NCR region. This
database expanded to 2,000 restaurants by end 2008. Expanded its reach to Kolkata, Mumbai, Bangalore
and Pune within the next six months That is when Info Edge (India), the parent company of the
Naukri.com group, invested 4.7 crores (US$1 million) in the business. In November 2010, Foodiebay.com
was renamed Zomato.com. The brand name was changed due to a possible move outside of the food
vertical and also to avoid a possible conflict with eBay, because the earlier brand name Foodiebay
contained ‘eBay’ in it.

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Geographical Coverage-

By 2011, Zomato’s coverage reached Chennai and Hyderabad as well. In 2011, Zomato also
launched applications for iOS, Android, Windows Phone and BlackBerry devices. In September 2012,
Zomato expanded to its first overseas location by launching its services in Dubai, UAE. This was followed
by quick expansion into Sri Lanka, Qatar, the United Kingdom, The Philippines, South Africa, New
Zealand, and more recently to Brazil, Turkey and Indonesia.
INVESTMENTS

Between 2010-13, Zomato raised approximately US$16.7 million from Info Edge India, giving
them a 57.9% stake in Zomato. In November 2013, it raised an additional US$37 million from Sequoia
Capital and Info Edge India.
In November 2014, Zomato completed another round of funding of US$60 million at a post-money
valuation of ~US$660 million. This round of funding was being led jointly by Info Edge India and Vy
Capital, with participation from Sequoia Capital.
In April 2015, Info Edge India, Vy Capital and Sequoia Capital led another round of funding
for US$50 million. This was followed by another US$60 million funding led by Temasek,
a Singapore government-owned investment company, along with Vy Capital in September.
In October 2018, Zomato raised $210 million from Alibaba's payment affiliate Ant Financial. Ant
Financial received an ownership stake of over 10% of the company as part of the round, which valued
Zomato at around $2 billion. Zomato had also raised an additional $150 million also from Ant Financial
earlier in 2018.

FINANCIAL ANALYSIS

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How did Zomato fare in FY18?

 Revenue

We did ~$74m in top line in FY18 as compared to $51m in FY17 – ~45% growth over last year.

 Cost/Burn
Operating burn for FY18 was ~$11m compared to $15m in FY17; $6m of the operating $11m burn
in this year was incurred in just February and March (when we decided to double down on
growth).

Ordering

In FY18, food ordering comprised ~30% of our revenues, up from ~18% in FY17. We are now live
in food ordering in 15 cities in India and 5 cities in the Middle East. We hit ~5.5m monthly food
orders in March 2018.

 Subscriptions (Zomato Gold and Zomato Treats)'

As on March 31, 2018, we have 280k+ active user subscribers (and growing very rapidly) across
our two subscription programs – Zomato Gold and Zomato Treats.

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  Advertising

Our advertising business grew slowly in this financial year for lack of focus. We had stopped
hiring in our ads business as we really wanted to crack the transactions piece as an organization.
The number of people in our ad sales team is down 20% since last year, but our ads revenue for
this year still grew by ~20% y-o-y.
~15,000 restaurants paid us for
advertisements in the last year. We
have started investing in growing this
business in the last month and we are
seeing some great results (more on
that a few months from now).

Profit and Loss

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NATIONAL EXPANSION

Zomato started providing their service in Bengaluru, Pune, Chennai, Hyderabad and Ahmedabad. By the
end of 2018 it has spread across the entire nation, providing their services in as many states and cities as
possible.
Food ordering app Zomato on Wednesday said it has launched its restaurant reviews and ratings platform
across 25 new cities in India, taking the number to 63 cities.
Newly launched cities are Thiruvananthapuram, Vijayawada, Raipur, Madurai, Jodhpur, Thrissur, Ajmer,
Manali, Alappuzha, Gorakhpur, Ooty, Kota, Manipal, Dharamshala, Jammu, Haridwar, Jalandhar,
Rishikesh, Mussoorie, Udupi, Cuttack, Shimla, Palghat, Pushkar and Srinagar.
After the previous expansion, Online food delivery platform Zomato expandedits operations to seven
cities including Dehradun, Agra, Patna, Mysore, Ranchi, Raipur and Aurangabad, making its presence
stronger in tier II cities ,in August 2017, stating that growth in tier II and tier III market have been very
beneficial for them.

INTERNATIONAL EXPANSION

On the 1st of September in 2012, Zomato launched its very first market outside of India – Dubai.
Also in September 2012, Zomato expanded overseas to the United Arab Emirates, Sri Lanka, Qatar, the
United Kingdom, the Philippines, and South Africa.
In 2013, the company launched in New Zealand,Turkey, Brazil and Indonesia with its website and apps
available in Turkish, Brazilian Portuguese, Indonesian and English.
In April 2014, Zomato launched its services in Portugal, followed by launches in Canada, Lebanon and
Ireland the same year.
The acquisition of Seattle-based food portal Urban spoon marked the firm's entry into the United States,
Canada and Australia, and brought it into direct competition with Yelp, Zagat and Open Table.
In September 2014, Zomato acquired Poland-based restaurant search service Gastronauci for an
undisclosed sum. Three months later, it acquired Italian restaurant search service Cibando.
In September 2017, Zomato claimed that the company had "turned profitable" in the 24 countries it
currently operates in.
Globally, Zomato is present in 24 countries and serves more than 50 million users every month.

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The above chart shows the relative market capture of Zomato including India(Delhi/NCR Region) in
comparison of some countries in which Zomato provides service.
The Strong/Medium labels indicate how Zomato view its position in that market, in terms of a multitude of
factors – including, but not limited to – our user base, client penetration, revenue, brand recall, and
competition.
Zomato though it has expanded across 25 countries , they are still doing everything to take Zomato to
more cities - to enable the growth of the restaurant industry and help our audience make better food
choices.
Zomato is further focusing on 21 cities across these countries, improving its presence and position in
newer markets like Kuala Lumpur (where they still consider their position of strength to be comparatively
‘Low’), and high-potential markets where they have yet to move into a position of strength, such as
Sydney and Istanbul.
A lot of this will be driven by operational improvements on the ground, backed by laser focus on our
consumer and business products.
Though Zomato provide its services globally ,India still continues to be Zomato’s highest priority market
and we will continue to expand and build further depth within the country.

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Future Expansions

Restaurants who used this service would get a certified tag from Zomato, alerting its users that the
restaurant was using quality ingredients.

He said, in 10 years, he saw Zomato even delivering raw materials to customers at home.

Zomato is also planning an entry into organizing events

Food ordering app Zomato on Monday announced its expansion in 17 new cities in India, taking the total
to 213 cities.

India continues to be our highest priority market and we will continue to expand and build further depth
within the country. We are doing everything to take Zomato to more cities - to enable the growth of
the restaurant industry and help our audience make better food choices," said Oytun Calapover, Global
Head - Listings Business, Zomato.

 On the product front, we are currently working on Zomato Book – our Table Reservations feature,
and Zomato Base – our PoS product. There are a couple more exciting projects that we are working
on, but it’s too soon to disclose them.

 On the geographical expansion front, we are looking to launch in Norway, Sweden, Denmark,
Finland, the Netherlands, Luxembourg, Belgium, Singapore and Malaysia over the next 6 to 9
months. We are currently looking at joining forces with food-tech start-ups that are trying to solve
real problems globally.

 Our current focus, for the 22 markets we are in, is on ramping up revenue while also building vertical
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depth within the restaurant space. We will expand our new product offerings, such as online
ordering, table reservations and cashless payments, to multiple geographies. For example, we piloted
the online ordering feature in India in late May and will soon launch it in Australia, UAE, Qatar,
South Africa and the Philippines. We will also launch the cashless payments feature in New Zealand
following the traction we have been seeing in the UAE.

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