Restaurant directory Zomato confirmed its acquisition of Urbanspoon today — marking a significant expansion in the U.S. for the seven-year-old New Delhi, India-based company.
The news was first reported by GeekWire on Sunday evening, with Zomato CEO Deepinder Goyal declining to comment when contacted by us. We’ve heard the purchase price is in the $60 million range — which is equivalent to how much Zomato raised in venture funding last fall from Sequoia and others. At the time of the acquisition, the company said it would use the funds to expand into new markets, with the U.S. being the most natural expansion spot.
Previously on GeekWire: Restaurant directory Zomato buying Urbanspoon as part of U.S. expansion
Urbanspoon, with more than 31 million app downloads and over 1 million restaurants in its directory, will give Zomato a nice footprint from which to expand as it looks to battle industry heavyweight Yelp. And that’s exactly what Zomato looks to be doing, with Goyal pointing specifically to its larger rival.
“The biggest challenge and most fun part of this move, however, is the fight we’re going to be picking with Yelp,” he writes. “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.”
Yelp attracted an average of 139.4 million monthly unique visitors to its Web site during the quarter ended September 30th. Another 73.4 million visited the company’s mobile applications and mobile site during that period.
In addition, Zomato says that it will integrate the Urbanspoon app and Web site over the next few months, meaning the Urbanspoon brand will be phased out.
Zomato raised $60 million in venture funding in November from Sequoia, Info Edge and others, bringing total financing in the startup to $113 million. The company was founded in New Delhi in July 2008, and now counts more than 330,000 listed restaurants in Canada, Brazil, Ireland and other countries.
Urbanspoon bootstrapped itself in the early years, riding to success in part through an innovative iPhone app that allowed users to shake the device in order to find nearby restaurants. The company, which was sold to IAC in 2009, sold off its Rezbook online restaurant reservation service to OpenTable in 2013, focusing efforts on its restaurant directory.
Here’s the full blog post from Goyal.
It might seem crazy but … we just acquired Urbanspoon.
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.
Urbanspoon has been a dominant player in the US, Canada and Australia for years now, and it’s a great business that’s been built on a solid foundation of exhaustive, rich local restaurant content. Everything they’ve done has been powered by a fantastic team that shares our vision and core values, and brings a wealth of local knowledge and expertise to the table. As we stand here now, we felt joining forces with Urbanspoon would be the best way to turbocharge our growth and make our way into the US, 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 UK, Canada, New Zealand, and Ireland.
Needless to say, the road ahead is a long one, and there are big challenges to overcome. For one, we’ll need to ensure that Urbanspoon’s website and app are integrated into Zomato smoothly over the next couple of months, without sacrificing the usability or utility of either. 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.
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 US, 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.
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.