Restaurant directory Zomato wasn’t the only one interested in devouring Seattle-based Urbanspoon.
GeekWire has learned that there were multiple bidders for the IAC-owned property, with other big-name technology and content brands participating in the process — including Yelp, The Food Network and Groupon.
Urbanspoon CEO Keela Robison declined to confirm the bidders in response to our questions. The Food Network did not immediately return emails seeking comment. Groupon and Yelp said it does not comment on rumors.
The bidding war represents a positive outcome for the company, which was facing closure more than a year earlier. A source close to the situation said IAC had considered shuttering the money-losing subsidiary more than a year ago.
“We had quite a few significant challenges a year ago,” acknowledged Robison, who was named CEO last summer.
In September, Urbanspoon’s parent company started the sales process, but after several rounds of negotiations, Zomato became the clear winner. It had cash from a recent round of funding and was willing to close fast. The final purchase price — first reported by GeekWire — was roughly $60 million.
Over the past year, a sale appeared to be in the company’s best interest.
Urbanspoon, which was founded in 2006 and acquired by IAC in 2009, increasingly felt out of place in Barry Diller’s Internet portfolio. It was recently moved to the group that includes Ask.com, after originally joining the City Search group, but even there its mobile emphasis seemed out of place among the Web giants.
Urbanspoon did try to diversify beyond its initial directory business. It invested heavily in building Rezbook, an online restaurant reservation service, but it sold that technology to OpenTable in 2013, leaving it with a much-neglected iPhone app that hadn’t been updated in several months.
At that point, IAC had considered shutting the company down, since going up against Yelp would require a sizable investment.
Instead, it decided to hire Robison to see if the company’s downward spiral could be reversed. While desktop traffic was still increasing when she joined, app downloads had fallen off a cliff. In the above chart, you can see the decline accelerated in 2013.
By the time discussions had been initiated with buyers in the fall, the company was profitable, and app store downloads were growing again. Today, Urbanspoon says two-thirds of its traffic is coming from mobile, and that mobile is growing 40 percent year over year.
“We got it to the point of profitability and restored app growth,” Robison said. “The Urbanspoon team worked incredibly hard over the past year to get us back to rapid app and user contribution growth. The acquisition is a direct result of those efforts.”
Despite the turnaround, Zomato isn’t interested in the company’s brand or technology assets. Zomato plans to phase the Urbanspoon brand and app out over the next few months, as it integrates Urbanspoon’s listings on to its platform.
Urbanspoon’s directory of more million restaurants will give Zomato a sizable presence in the U.S., where it will battle with heavyweights like Yelp, which it ironically already beat out in the bidding process.
Most of Urbanspoon’s 40 employees will remain with the company, except for four or five employees. Robison will also be leaving after she completes a transition period over the next few months.
Zomato was founded in New Delhi in July 2008, and now counts more than 330,000 listed restaurants in Canada, Brazil, Ireland and other countries.
