An Interesting Insight about Zomato from Deepinder Goyal, Founder & CEO, Zomato
Deepinder Goyal, Founder & CEO, Zomato, is the Founder and CEO of Zomato. Prior to starting Zomato, Deepinder worked as a management consultant with Bain and Company in New Delhi. 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. He left Bain in 2008 to start Zomato (then foodiebay) out of his apartment and has since overseen strategy and product development. Deepinder graduated with a Mathematics and Computing degree from IIT Delhi in 2005 and hails from Muktsar in Punjab.
Zomato, founded in 2008, is India's largest restaurant guide listing over 42,000 restaurants across 12 cities in the country – Delhi NCR, Mumbai, Bangalore, Chennai, Kolkata, Pune, Hyderabad, Ahmedabad, Jaipur, Chandigarh, Lucknow and Indore. Zomato was started by IIT Delhi alumni in July 2008 for Delhi NCR and has expanded its services over a span of 4 years to 12 cities in India. Info Edge has invested over $6.5M in Zomato since 2010. Zomato has recently forayed into print as well with the Citibank Zomato Restaurant Guide 2012. Zomato is headquartered in New Delhi and currently employs 150 people. Zomato has expanded into the international markets with the launch of their Dubai section and will expand to more cities in the Middle East and South East Asia by the end of 2012.
Replying to Anil Mascarenhas of IIFL, Deepinder Goyal says, "Over 4 million Zomato users come to the website every month to search places for dining out, home delivery, catching up or nightlife."
Did the idea to start Zomato come from the demand for menu cards among your colleagues?
Yes, after graduating, while I was working at Bain and Company, I noticed people queuing up in the pantry everyday trying to look for menus to order food and that's when the idea struck me – what if we could access these menus online. The users can use this website that will provide in-depth information about restaurants and events (e.g. menu cards, contact details, pictures, directions, rating and reviews) to its users helping them make a well informed decision before stepping outside their house. One can also get an opinion about the restaurants through the reviews written by people who have already visited the place.
Explain to us your business model. To what extent is it scalable?
Over 4 million Zomato users come to the website every month to search places for dining out, home delivery, catching up or nightlife. 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. The model is based on hyper-local advertising and also takes into account user preferences - this combination is scalable to quite a large extent.
What is your USP?
Zomato has an exhaustive range of menus and regularly updated information for over 42,000 restaurants across 12 major cities of India and 4,000 restaurants in Dubai. By providing menus, pictures, locations, ratings, reviews we ensure that our users find every piece of information about the restaurant they are looking for. A clean and simple interface across mediums enables users to get what they want in three simple steps. Users can also access Zomato wherever they are - be it online/on their smartphones/via the print guide which makes Zomato platform agnostic. The recently added social features also gives us an edge as users can engage with other foodies on Zomato and discover places to eat around them through user recommendations.
Besides the website, how else do you reach out?
We have always maintained that Zomato is platform agnostic – apart from the website, we have apps for all major smartphones (Android, iPhone, BlackBerry, Nokia OVi, Windows, etc) and are now also available in print with the Citibank Zomato Restaurant Guide 2012. We want to reach out to users across platforms and make the process of what to eat and where to find it as easy as possible for them.
How did you go about convincing initial investors? What were their apprehensions?
When it comes to consumer facing portals the biggest apprehension is around the famous chicken and egg problem - customers find value only if we have the most exhaustive in-depth information on restaurants while restaurant owners find value only if we have enough customers. We solved this problem though by providing a rock solid content platform which provides all possible information for ~99% of restaurants across 12 cities in India. This combined with the fact that we were able to find level headed people to work with us gave our investors the confidence to invest in us.
What are your capex plans and how would they be funded? Brief us on your international expansion.
We are currently utilizing the previous round of funding for our capex plans which involves Operational set-up and R&D/Technology. Zomato has expanded into the international markets with the launch of their Dubai section and will expand to more cities in the Middle East and South East Asia by end of 2012.
Tell us about your latest round of funding. What is the total amount brought in by investors so far?
Info Edge has invested $6.5mn in Zomato since 2010.
What is the shareholding pattern at present?
Since we are a private company we cannot share these details.
Is there any cyclicality in your business?
As a startup we have seen exponential growth in the last 4 years. It will be a while before our growth stabilises and we start seeing growth patterns - cyclical or counter cyclical.
From the experience on your website, what kind of food trends are you seeing in cities? Share with us some of the popular cuisines.
From what we have observed, North Indian, Chinese and Italian are most popular cuisines across cities listed on Zomato in India while there are a few city specific specialities which are searched for more depending on the city. For example, some very specific searches such as microbreweries in Gurgaon have seen a lot of growth over the last couple of years.
Any numbers on the average spend in Grade I dining outlets.
On average, an Indian user spends roughly around Rs800-1000 for a meal for two. However, when it comes to premium restaurants this spend goes up to Rs1200-1300 on average.
How many restaurants do you have on Zomato. Which are the main cities you cover?
We currently have over 42,000 restaurants listed on Zomato across 12 cities in India and over 4,000 in Dubai. We have a presence in Delhi NCR, Mumbai, Bangalore, Pune, Hyderabad, Chennai, Kolkata, Chandigarh, Ahmedabad, Jaipur, Lucknow, and Indore. The Dubai launch is Zomato's first step in its International expansion plans.
You also have a print version. How has the response been?
The response to our print guide online has been much better than we anticipated for first timers in the print space. All the guides are in the channels right now. While they are selling well, we will have a good picture by the end of the year on the exact numbers.
What is your staff strength? What do you look for when you hire people?
Zomato currently employs 150 people. We look for 4 key qualities in people while hiring them; Ethics, Respect, Attitude and Skills in that order.
Any lessons from IIT which help you in this venture?
The one thing that IIT Delhi taught me was how to get things done, more than the technical education. My biggest takeaways from IIT are focus, persistence and follow through.
Tell us about your family. Besides work how do you spend your time.
I come from Muktsar and that's where my parents are based. I live in Gurgaon with my wife and have been in the Delhi NCR region since my IIT days. Besides work, when free, I enjoy a good swim every now and then, going on long drives and reading up on things that interest me.
What would you like to be known as?
From zero to 4 million users per month, 8.5 lakh plus app downloads, 150 young and enthusiastic Zomans spread across 14 offices (2 outside India), 42,000 plus restaurant listings in India and 4000 plus in Dubai, and over 1000 clients, Zomato's journey over the 4 years has been nothing short of exciting. We recently expanded from 10 to 12 cities in India with the launch of our Lucknow and Indore sections. We are currently working on the launch of 3 more cities within India and after the initial success of our Dubai section in the international markets we are now focusing on the launch other cities in the Middle East and South East Asia by the end of 2012. We have a long way to go and going by the mounting interest and dependency being shown in us we will be around for long. However, we would like to be known as a friendly neighbourhood restaurant guide.
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