Zomato Raises $60M, Pushes Mobile Dining Discovery

Mobile restaurant search is taking over the world. New Delhi-based startup Zomato has raised another $60 million in funding for international expansion — which may include reaching into the U.S. in 2015.

Mobile restaurant search is taking over the world. New Delhi-based startup Zomato has raised another $60 million in funding for international expansion, which may include reaching into the U.S. in 2015.

Then again, it may not. India is Zomato’s strongest market, but it now operates in more than 100 cities in 18 countries. Its most recent additions are the Czech Republic and Slovakia, after wolfing down and, the leading restaurant guides in those two countries in August. Zomato is also planning to enter Malaysia and Ireland in the next few months, with Australia on the table as well.

And the U.S.? “The potential of the untapped markets outside the U.S. is humungous, and so is the opportunity in the U.S.,” says Zomato co-founder Pankaj Chaddah. A move into the U.S. “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.”

One of the variables that would determine that timing was new investment, which Zomato now has. The Series E round was led by India’s Vy Capital and included current investors Info Edge and Sequoia Capital. The round more than doubles total funding to almost $114 million, and values Zomato at $660 million.

Another factor is how Zomato operates. The company started out as a menu-scanning service, and it still sends employees out to personally recheck menu data for each restaurant every three months. That differentiates Zomato from competitors like Yelp, Urbanspoon and OpenTable, but it’s also much more labor intensive, making a move into U.S. cities costly.

Yet another factor may be Zomato’s steady traffic shift to mobile apps, which now accounts for more than half of the company’s 30 million visits per month across both mobile and web. In the U.S., restaurants are now the most-searched industry, and on-the-go searches have become the most common type of restaurant discovery, according to a study last year by Google and Nielsen. That shift suggests that mobile is driving a fundamental change in how customers search for places to eat.

But another 2013 survey, by Constant Contact’s Singleplatform, found that while mobile phone searches are gaining ground, they still represent only 35 percent of restaurant discovery, with desktop searches at 46 percent and tablets at 19 percent. Whether being ahead of the mobile game would be a U.S. advantage for Zomato isn’t clear.

And while a major part of Zomato’s international growth has come through acquiring the top restaurant search companies in new markets, moving into the U.S. would mean entering a crowded market as well as sharpening competition with international rivals. Along with Yelp, OpenTable, EAT24, Foursquare and a long list of smaller players focused on U.S. cities, Zomato would also be going head-to-head against Zagat, Restaurant Finder and other restaurant discovery apps that operate around the world.



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