Zomato said in November its U.S. expansion plans would likely hit in the second half of 2015, but the restaurant directory announced Monday (Jan. 12) that expansion will hit quite a bit sooner with its acquisition of Urbanspoon.
During the time of expansion talks, the New Delhi-based startup Zomato announced it had secured $60 million in new funding, bringing its total raised at that time to $113 million. Reports speculate that Zomato has purchased the Seattle-based company for somewhere in the $60 million range. Zomato didn’t publicly release the purchasing price Monday, but the company did make a blog post about its decision and next steps.
“If the past year was anything to go by, we knew 2015 was going to be big in a lot of ways. And we honestly can’t think of a bigger, better way to start the year. While we’ve been able to bring some great contemporaries into the fold over the past few months, this one is different. For one, we spent most of our last round of funding on this acquisition – but we’ve always believed that the edge of our comfort zone is where the magic happens,” the Jan. 12 Zomato blog post read.
The acquisition is also adding a significant customer base for Zomato. According to Zomato, its service currently has more than 35 million visits per month, but Ubrbanspoon has more than 80 million visits per month. Zomato is in 150-plus cities, has more than 300 restaurants under its belt, 400,000 reviewers and 4.8 million restaurant reviews. To compare, Urbanspoon is in 500-plus cities, is connected with more than a million restaurants, has 1.4 million restaurant reviewers and more than 43 million reviews.
“Joining forces with Urbanspoon would be the best way to turbocharge our growth and make our way into the U.S., Canada and Australia. Without question, this will also help us take significant strides forward in the markets we’ve been sharing with Urbanspoon so far – the U.K., Canada, New Zealand, and Ireland,” the post read.
In the company’s acquisition announcement, Zomato also recognized the challenges of taking a company with such an established infrastructure. This includes integrating Urbanspoon’s website and mobile app into Zomato’s interface during the next few months.
“The road ahead is a long one, and there are big challenges to overcome. ….Urbanspoon has built vast legions of faithful followers over the years, and we’ll need to work extra hard to ensure that the finished product is one that users and merchants alike will love and enjoy using,” the post read. “Another challenge – usually our biggest – is going to be finding a bunch of people as crazy as we are to drive our operations in the U.S., Canada and Australia. We’re very fortunate to be welcoming the Urbanspoon team into Zomato, which will be immensely valuable as we grow the forces in each of these countries.”
Keeping with its tongue-in-cheek language, Zomato also acknowledged Yelp as its biggest competition, but said it was prepared for the “fight.”
“The biggest challenge and most fun part of this move, however, is the fight we’re going to be picking with Yelp. In the market they have dominated for so long. After all, like Mark Twain famously said: ‘it isn’t the size of the dog in the fight, it’s the size of the fight in the dog,'” the blog post read.