Rise of Zomato - Strategic Acquisition

Rise of Zomato - Strategic Acquisition
Zomato is a Multinational Indian restaurant and food delivery startup started as foodiebay in
the year 2008 and renamed Zomato in 2010. This Foodtech unicorn was founded by CEO &
founder Deepinder Goyal and co-founder Pankaj Chaddah. It currently operates in more than
23 countries and it primarily focuses on the Indian Market for growth potential. Zomato
offers its services in 526 cities in India with 3,50,174 active restaurants listings.
Zomato has acquired 12 startups globally.

 · Zomato made its first acquisition in July 2014 by buying Menu-mania to make zomato
and menu-mania the largest Restaurant service provider in New Zealand.
 · The company went to acquire LunchTime and Obedovat, targeting the Czech Republic
and Slovakia in Europe.
 · Zomato stretch its arms in Poland by acquiring Poland-based restaurant search service
Gastronauci.
 · In December 2014, it acquired Italian restaurant search service Cibando.
 · In 2015, Zomato Closed a deal with Seattle-based food portal Urbanspoon which said
to be the largest deal to enter into US Markets.
 · In 2015, it acquire Delhi-based startup MapleGraph to use it cloud-based point sale for
restaurants called MaplePOS and rename it as Zomato Base.
 · NexTable, a US-based table reservation and restaurant management platform
 · To improve the delivery experience of Zomato customers, Zomato acquire Sparse Labs,
which was a logistics based start-up in 2016.
 · In September 2018, Zomato acquired Bengaluru -based food e-market, TongueStun
Food, for about $18 million in a cash and stock deal.
 · Zomato acquired the startup in December 2018, TechEagle Innovations, which works
exclusively on drones.
 · On 21 January 2020, Zomato acquired its rival Uber Eats business in India in an all
stock deal, giving Uber Eats 10% of the combined business.
 · Recently in June 2021, Zomato signed a deal with Grofers to invest nearly $120 Million
in the online grocery firm and seeks to acquire 9.3% stakes of the company.
Zomato took an edge in the Food delivery market by acquiring uber eats in 2019 and taking
advantage of the negative financials of uber eats which will not allow uber eats to compete
against swiggy and Zomato. After acquiring Uber eats, Zomato’s share in the market increase
by 50% and with the effective and speedy service of uber eats, Zomato maintains efficacy in
market. Restaurants who are already with Zomato will give a gold offer to Uber eats
customers such as dining out and delivery. But restaurants will lose their bargaining power.
Moreover, 100 employees will be reallocated or laid off due to acquisition. Zomato acquires
uber eats through stock deal acquisition where the acquirer assumes all liabilities and assets
of the business and the buyer can also contractually allocate the liabilities. The cost of
acquisition is minimal and the deal is easy to execute. Also, Goodwill is non-tax deductible.
On April 28, Zomato Disclose to the Securities and Exchange Board of India to kick off a
public offering. Zomato, one of India's top food delivery services plans to raise $1 billion
through the IPO process. The funding could help Zomato fend off competition from its top
rival, Swiggy, as well as a small but menacing Amazon.
In 2020, Zomato tried to enter into online grocery deliveries service in over 80 cities,
however, the service was closed in a couple of months after its launch.
Recently Zomato invested $ 100 million in online grocer Grofers and seeking CCI nod for
about 9.3 stake. Zomato wants to expand beyond food delivery category by putting a hand
over the online retail market of India, and Zomato is no way back in Strategic acquisition.
But Zomato has to face tough competition in India as the Growth potential of the online retail
market in India has attracted Reliance- Future group, Amazon, Flipkart- Wallmart, Tata- Big
Basket and other online retail entities.
Meanwhile, Swiggy is focused on re-mapping the way India eats for now but slowly
expanding to re-map how India orders groceries. On the other hand. Zomato is more aligned
and focused on food being its core. It was more about you making the choice of where and
what to eat. Zomato's domestic IPO plan will be closely watched by market participants and
industry alike at a time when Indian startups have attracted a wave of fundraising interest.
There is a lot of Probability that funds raised by IPO will be used by Zomato to acquire more
stake in Grofers or other Online retail platforms to capture a larger retail share of the Indian
market and build a bridge towards profitability.

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Rise of Zomato - Strategic Acquisition

Zomato has acquired 12 startups globally.

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