Journey From Startup To IPO, Challenges And Life of Zomato

Zomato, a name that has become synonymous with food delivery and restaurant discovery in India and beyond, exemplifies the rollercoaster journey of a startup scaling to a publicly listed company. Founded in 2008 by Deepinder Goyal and Pankaj Chaddah, Zomato’s evolution from a modest restaurant menu aggregator to a global food-tech giant valued at billions is a tale of innovation, resilience, and strategic adaptability. However, this journey was far from smooth, marked by significant challenges, bold risks, and transformative milestones, culminating in its historic Initial Public Offering (IPO) in July 2021. Let’s dive into the life of Zomato, exploring its inception, hurdles, and the path to becoming India’s first tech unicorn to go public.

The Genesis: From Foodiebay to Zomato

Zomato’s story began in a Bain & Company office in Delhi, where Goyal and Chaddah, both IIT Delhi graduates, identified a simple yet pervasive problem: their colleagues struggled to access updated restaurant menus during lunch breaks. What started as a side project—scanning and uploading menus onto a private company network—quickly gained traction. Sensing potential, the duo launched Foodiebay in 2008, a platform aggregating restaurant information online. Within nine months, it became Delhi-NCR’s largest restaurant directory, prompting a rebrand to Zomato in 2010 to avoid confusion with eBay and signal broader ambitions.

Initially, Zomato focused on discovery, offering menus, reviews, and ratings—a novel concept in a pre-smartphone India. The founders bootstrapped the venture with minimal resources, manually building a restaurant database. Early funding from Info Edge (India), led by Sanjeev Bikhchandani, provided the first $1 million in 2010, kickstarting Zomato’s growth. This humble beginning laid the foundation for a company that would eventually reshape how millions dine.

Scaling Up: Expansion and Evolution

Zomato’s early years were about rapid expansion. By 2011, it had spread to major Indian cities like Mumbai, Bangalore, and Chennai. In 2012, it took its first international leap, entering Dubai—a move that yielded surprising traffic but also foreshadowed future challenges. Over the next few years, Zomato expanded to over 20 countries, including the UK, Brazil, and the US, acquiring local players like Urbanspoon (2015) to bolster its global footprint. However, this aggressive growth came at a cost.

The shift from a discovery platform to a food delivery powerhouse began in 2015, spurred by changing consumer habits and the rise of smartphones. Zomato partnered with logistics firms like Delhivery and later built its own delivery network, competing head-on with Swiggy, UberEats, and others. Strategic acquisitions—like Runnr (2017) for logistics, TechEagle (2018) for drone delivery exploration, and Blinkit (2022, formerly Grofers) for quick commerce—diversified its offerings, positioning it as a multifaceted food-tech leader.

Challenges Along the Way

Zomato’s journey was riddled with obstacles. Early on, convincing restaurants to join a nascent online platform was tough; many saw no value in digital listings. Internationally, Zomato faced fierce local competition and regulatory hurdles, leading to exits from markets like the US, UK, and Brazil by 2016 after the Urbanspoon rebranding flopped. Deepinder Goyal later admitted, “We launched in 10 countries and failed in half of them,” highlighting the pitfalls of overexpansion.

Financially, Zomato burned cash relentlessly. Despite revenue growth—from ₹446 crore in 2018 to ₹2,604 crore in 2020—losses mounted, peaking at ₹23,850 million in 2020. Layoffs in 2015 (300 employees) and operational retreats signaled tough times. The 2020 COVID-19 pandemic hit hard, shuttering restaurants and slashing orders, though a swift recovery followed as demand for delivery soared. Controversies, like delivery partner strikes in 2019 and a 2021 assault allegation against a delivery worker, tested Zomato’s crisis management and public perception.

Competition remained a constant threat. Swiggy, backed by deep-pocketed investors, matched Zomato’s discounts and innovations, while global giants like Amazon eyed India’s food delivery market. Regulatory scrutiny from the Competition Commission of India over alleged unfair practices added pressure. Yet, Zomato’s ability to adapt—pivoting to grocery delivery during lockdowns, then refocusing on core strengths—kept it afloat.

The IPO Milestone: A Game-Changer

By 2021, Zomato stood at a crossroads. Years of losses and a looming funding crunch pushed it toward an IPO—not by design, as Goyal later revealed, but as a survival strategy amid its “worst crisis ever.” Announced in April 2021, the ₹9,375 crore IPO (comprising ₹9,000 crore fresh equity and ₹375 crore from Info Edge) was meticulously timed. A global bull market, low interest rates, and a post-pandemic digital boom created a perfect window. Strategic shareholding rejigs—reducing Ant Group’s stake and onboarding US funds like Tiger Global—smoothed the path.

Launched on July 14, 2021, the IPO was a resounding success, oversubscribed 38 times. Listing at ₹116 on the NSE—a 53% premium over the ₹76 issue price—Zomato’s market cap soared past ₹1 lakh crore, making it one of India’s top 50 firms. The IPO not only raised capital but also marked a watershed moment for India’s startup ecosystem, paving the way for peers like Paytm and Nykaa.

Life After IPO: Growth and New Horizons

Post-IPO, Zomato’s stock saw volatility, hitting ₹169.10 in November 2021 before stabilizing. By FY24, it reported a 70.1% revenue jump to ₹2,416 crore in Q1, achieving consecutive profitable quarters—a testament to its maturing business model. Food delivery remains its backbone, but Blinkit’s quick commerce and Hyperpure (a B2B restaurant supply arm) are emerging as growth engines. With over 80 million active users and a 55% market share in India, Zomato operates in 1,000+ cities across 24 countries as of 2025.

Yet, challenges persist. Sustaining profitability amid competition, managing delivery partner welfare, and scaling quick commerce profitably are ongoing tests. Goyal’s vision—rooted in agility over rigid processes—continues to drive Zomato, with investments in 15+ startups signaling a broader tech ecosystem play.

Conclusion: A Blueprint for Resilience

Zomato’s journey from a startup scanning menus to a publicly traded giant is a masterclass in perseverance. It weathered financial strain, global missteps, and fierce rivalry, emerging stronger through innovation and customer focus. Its IPO wasn’t just a financial triumph but a symbol of India’s new economy maturing. For entrepreneurs, Zomato’s story offers lessons in solving real problems, embracing adaptability, and timing the market—proof that even in a crowded field, a relentless pursuit of “never having a bad meal” can lead to extraordinary success.