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Feb, 12 2015

Zomato to enter food delivery biz in March, investing Rs 300 crore

With the new food ordering business, Zomato will charge restaurants a commission ranging from 7.5% to 15% based upon the rating of the eatery.

Zomato, a Gurgaon based restaurant discovery platform which has created a milestone in restaurant discovery platform globally tby acquiring US rival Urbanspoon last month, will soon expand its business into food delivery segment.

The firm is currently piloting online ordering in India and will soon go live with the feature in Delhi next month.

Zomato will give a tight fight to its global competitor Foodpanda and Yelp by catering to the fast growing online market in India.

" We will enter in the online ordering segment by March with around 2,000 restaurant partners who are presently listed on our site. Over the next three months, we are aiming to offer this feature with over 10,000 restaurant partners in India. The feature will also be made available in Bangalore and Mumbai with more cities to follow," said Deepinder Goyal, Co-Founder & CEO, Zomato.

Zomato will act as the tech platform allowing users to select their dishes and order their meal online and the payment will be done through cash on delivery. The restaurant has to manually accept each order from a user before it is processed as compared to passing orders from users to restaurants as other services do.

"We are hoping to start processing around 40,000 orders a day in the very near term. Given that we have 400,000 people who visit our India section every day, this shouldn't be too hard to achieve. We will launch the service overseas in a few months starting with Dubai, Jakarta, Manila and Sydney," Goyal added further.

Zomato is currently testing the service among its 500 staff in India and a handful of restaurants. The firm has raised over $110 million till date, including a recent $60 million round to accelerate the company's global expansion and new product development. Post acquiring Urbanspoon for about $50 million, the firm is in talks to raise about $100 million in fresh round of funding.

Zomato plans to make money from this new service via cut of each order, but the exact size of its fee will be based on feedback from customers directly. In the case of a five star rating, Zomato will take a 7.5 per cent commission fee, but that cut will rise to a maximum of 15 per cent for the lowest customer feedback.

"Our revenues are likely to double in the next fiscal with this new stream of revenue model. Through this, we will charge restaurants a commission based on the rating of the outlets," shared Goyal.

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