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Zomato Buys Urbanspoon For $50 – $60 Million To Enter US Local Search Market
Company aims to build dominant restaurant search site/app on global basis.
International restaurant search provider Zomato has acquired Urbanspoon from IAC for between $50 and $60 million in cash. Zomato was founded in India in 2008 but now operates in more than 20 countries and 130 cities globally.
Urbanspoon content will be incorporated into Zomato and the Urbanspoon brand will go away after a short transition period. Zomato hopes to launch its new, integrated app in North America in March.
Zomato recently received $60 million in funding from Sequoia Capital, most of which it spent on this acquisition to enter the North American market. Zomato has raised more than $100 million so far. The purchase price range was confirmed by the company. Geekwire was the first to report the news last night ahead of the embargo.
The company said it’s “already a dominant player in markets across the globe, including India, the UK, Europe, South East Asia, and South America.” The Urbanspoon acquisition caps a six month buying spree in which Zomato acquired restaurant verticals in New Zealand, Poland, Czech Republic, Slovakia, Italy and Turkey.
Zomato pointed out that Urbanspoon “will more than double Zomato’s web traffic from 35 million visits per month to over 80 million.” And it will boost its restaurant listings from roughly 300,000 to more than 1,000,000 globally. Zomato will be directly competing with Yelp, Foursquare, TripAdvisor, Google, YP and various others in the restaurant category. Restaurants is the number one local search category in the US.
Zomato uses OpenTable for restaurant bookings in the UK and will do so in North America. The company also plans to roll out mobile payments this year.
The following is a short email interview of Zomato CEO Deepinder Goyal conducted this morning:
Will you comment on the acquisition price; it seems expensive.
No comment on price. As for the value of the acquisition – one of our dominant large-market entry strategies has been acquiring strong players in the market. Considering Urbanspoon is a market leader in the US and they have built a solid foundation of rich local content over the years, we felt it was the perfect way to enter the US market.
How long before Urbanspoon becomes Zomato in North America?
Our product teams are going to work closely together to port all restaurant and user-generated content and features from Urbanspoon onto the Zomato platform. We plan to do this in phases to ensure the user and merchant experience remains smooth during the transition.
This formula has worked well with our recent acquisitions. We look forward to a solid combined product that will provide an enhanced experience to both users and merchants. We are aiming to launch the integrated product by the end of March 2015.
Beyond booking, what is Zomato’s plan for payments?
Next month, we will be releasing our payments product in Dubai. We will analyze its performance in this market, and depending on how it performs, we will take the product to more markets.
Will Zomato get into food delivery in North America?
We will work with partners like Grubhub and Eat24 to bring that feature to the app. Unlikely that we will get into the business directly.
What percentage of Zomato’s current traffic comes from mobile devices?
Around 55 percent of Zomato’s traffic comes from mobile devices. Around 65 percent of Urbanspoon’s traffic comes from mobile devices.
Below is a September 2014 interview of Goyal following Zomato’s acquisition of Polish site Gastronauci: