There's money to be made in the restaurant recommendation business. Yelp makes bank by enabling users to point other users towards good places to eat and other local establishments. Urbanspoon made a name for itself over the years doing something similar. Recently, the latter attracted the attention of Zomato, an India-based company with a presence in Asia, Europe, and South America.
Zomato announced on its blog today that it has acquired Urbanspoon, which will help it expand into the US, Canada, and Australia. This should also improve its efforts in the UK, New Zealand, and Ireland, where there was already some overlap.
It's not everyday that we see an India-based company purchase an American one. The amount of money to exchange hands hasn't been disclosed, but Zomato says it spent most of its last round of funding on the acquisition. The company raised $60 million from Sequoia Capital, Info Edge, and Vy Capital at the end of 2014, and TechCrunch reports it to have spent somewhere between $50 million and $60 million for Urbanspoon.
With Urbanspoon under its belt, Zomato will now be in 22 countries around the world. The purchase should more than triple its database of restaurants, bringing the total up to over a million. In the months ahead, Urbanspoon traffic will move to Zomato.com, and Urbanspoon users will get their hands on the Zomato app. The company intends to add mobile payment options along with the ability to search among specific food items in future updates.
Restaurant Search App Zomato Makes Landmark Acquisition of Urbanspoon to Fuel Global Expansion
SEATTLE, January 12, 2015 /PRNewswire/ --
Today Zomato, a leading restaurant search app, announced it has acquired IAC-owned Urbanspoon in one of the largest purchases ever of a U.S.-based consumer Internet company by an Indian startup. The strategic deal marks Zomato's entrance into North America and strengthens its position as a premiere destination for millions of people around the world who want a better way to find places to eat.
(Logo: http://photos.prnewswire.com/prnh/20150112/724382 )
Zomato enables users to find the best restaurants nearby, with access to local restaurant reviews and a rich collection of information about where to go and what to eat. Zomato is already a dominant player in markets across the globe, including India, the UK, Europe, South East Asia, and South America. In the past six months, Zomato has acquired six local, dominant restaurant search players in New Zealand, Poland, Czech Republic, Slovakia, Italy and Turkey, including Poland's Gastronauci and Italy's Cibando to expand its global footprint.
The acquisition of Urbanspoon will more than double Zomato's web traffic from 35 million visits per month to over 80 million. It will also more than triple the company's inventory of restaurants from 300,000 to more than 1,000,000 globally. Zomato is now active in 22 countries.
"We have been planning our entry into the North American market for some time, and Urbanspoon's excellent reputation and foothold in North America, Australia and the UK provides the perfect opportunity for our global growth," said Deepinder Goyal, Founder and CEO of Zomato. "We are delighted to welcome Urbanspoon and their audience into Zomato. We will soon be integrating the two products to bring the best of both products to all of our users."
Founded in 2008, Zomato is backed by Sequoia Capital. The company sets itself apart from competitors with a grassroots approach to gathering and curating useful restaurant information. Zomato hires local residents to scan menus, take photos, and create recommendations, which enables the company to provide richer, more accurate data than other restaurant apps. And while other restaurant search services provide basic information (such as hours of operations and address), Zomato takes the experience a step further by delivering real-time information, up-to-date reviews, maps/directions, and ratings. Zomato also enables users to place table bookings directly from the iOS and Android apps.
This acquisition provides immediate benefits to both businesses. Zomato's hyperlocal advertising model and its "Zomato for Business" app suite allows restaurants to engage more deeply with customers, imparting significant benefits to all Urbanspoon restaurants and customers. In the coming months, all Urbanspoon traffic will move to Zomato.com, and all Urbanspoon app users will be able to use the Zomato app.
"Zomato has experienced phenomenal growth in recent years, and our customer bases complement each other's perfectly," said Keela Robison, Urbanspoon CEO. "Zomato's significant investments in people and technology will bring Urbanspoon customers, restaurant owners, and food bloggers a number of new capabilities and features. We're excited to combine our strengths to accelerate growth."
"The talented Urbanspoon team have done an outstanding job to drive the business forward and cement the brand as a leader in restaurant discovery," said Joey Levin, CEO of IAC Search & Applications. "Their passion and commitment have created remarkable value for diners, as evidenced by today's news. We wish them continued success."
Today's news follows a huge year for Zomato, which raised $60 million from Sequoia Capital, Info Edge, and Vy Capital in November 2014, bringing the total investment into the company to $113 million to date. Zomato also recently announced plans to add mobile cashless payments and additional discovery features, like being able to search among specific food items, which it will integrate across its apps globally.
The Zomato app is available at GooglePlay, iTunes, Windows Phone Store, or visit, http://www.zomato.com.