Zomato: Investor Deck - Sequoia Capital India

© 2013 - Zomato Media Private Limited (India)

Zomato: Investor Deck September 2013

Executive Summary (1 of 2)

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•  Zomato is an online restaurant discovery platform and a vertical social network in India, UAE, UK, Philippines, South Africa, New Zealand, Qatar and Sri Lanka

•  One of the top visited websites and top downloaded mobile apps across countries o  More than 12 million users per month (50-50 split across web and mobile)

•  Zomato’s traffic is growing at ~20% m-o-m; all markets including India still growing fast o  Zomato’s is already the market leader in India, UAE, South Africa, Qatar and Sri Lanka o  Other markets growing fast – should reach market leadership within 3-6 months

•  The key strength of Zomato is the quality of the product o  Focus on a specific vertical makes the product appealing to a targeted audience

o  Most of the content on Zomato is collected by a large in-house team o  Gamified (and incentivized) reviewing system ensures Zomato gets adequate number of user

reviews for restaurants

o  This unique combination, ensuring top-quality & reliable content on Zomato, creates barriers to entry for other players

•  Frequently mentioned in the list of top tech products from India; better than counterparts in the US •  Zomato in India, as a brand, is frequently referred to as a concept, than as a product

Executive Summary (2 of 2)

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•  Zomato monetizes its traffic through hyper-local display ads on the website and mobile o  Current revenue at INR ~22M ($400K) per month; expected to reach $600K by Jan’14 o  Zomato’s client base consists of restaurants who want to reach out to a targeted audience o  On an average Zomato makes ~$200 per advertiser per month o  Zomato has a proven and scalable revenue model; currently, Zomato has hit net profitability in

India, gross profitability in UAE, and is on road to healthy revenue in all its other markets •  Over time, Zomato aims to sign up 15% of the industry base as paid advertisers

o  15% benchmark has already been hit in some key markets as proof of concept o  In 2016, Zomato should have ~400k restaurants (currently ~110k) in its database o  With ~60k advertisers, at current monetization levels, this means total revenue potential of ~$150M/

year o  This needs large feet-on-street for sales; unit economics are profitable in all locations

•  Zomato aims to replicate its business model in more countries o  Zomato is aiming to raise $40M of capital to support entry into other markets primarily in Asia,

Latin America and Europe (Expansion into Brazil, Turkey and Indonesia already underway) o  Each country will take $2-5M of investment (depending on size of market) to quickly reach market

leadership position and hit profitability o  A large consumer presence enables the business to integrate backwards for significant further

monetization – e.g. table reservations, online orders, etc.

DEEP DIVE

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Zomato was started with the vision of helping people discover more places to eat around them.

Started in 2008; currently one of the fastest-growing products in this space.

Why was Zomato created?

Zomato has been made available for all platforms – web, mobile as well as print

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Web

Mobile

Print

Zomato is currently present in 27 cities across 8 countries

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2008 2009 2010 2011 2012 2013 2015

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No. of cities Projected

27

Plans to add ~40 more cities over the next 2-3 years

Launching Sao Paulo, Istanbul and Jakarta by

the end of 2013

So, why does Zomato work? Two things – focus and depth.

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Focus

Zomato is a rich content platform accentuated by user generated content

Web 1.0 – Content platform built around restaurant listings (>100k listings) with

rich information including menus, photos

Web 2.0 – User reviews & ratings, personal profiles and picture uploads;

creating a vertical social network

•  Zomato only focuses on one vertical - restaurants

•  Due to this focus, we are able to build the

product experience just around restaurant and food discovery

Focus on a vertical makes the product appealing to a targeted audience

Depth A B

Focus: Zomato is centered around restaurant and food discovery

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The home page is an entry point for a user to start exploring eating out options, and search by preference (by locations, cuisines or by dish names); users can also search by dining channels – take-away / dine-in / nightlife etc.

The search page allows the user to see restaurant listings as per his choice and filter them further

A

Each restaurant page has information like address, phone numbers, typical cost for two, attributes, menus, pictures & map co-ordinates

Depth (1 of 3): we have a large in-house team focused on keeping our information fresh and relevant

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•  100,000 listings across cities – all information updated every three months •  Managed by ~100 people (local content teams across all our various

locations) •  30,000 data points modified every day •  ~500 incoming requests per day, from restaurant businesses to update

data about their listings •  1,000 menus collected on-field, scanned and updated every day

The content operation is very similar to a mapping (cartography) operation. We are the only local search company in the world with very real-time and

updated data

B

Web 1.0

0

5,000

10,000

15,000

20,000

Yelp Zomato

Number of restaurants listed

OpenTable

~2,500

12,500

TripAdvisor

18,000

Depth (2 of 3): we have comprehensive and updated data in each of the cities we are present in (London case study)

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B

Web 1.0

~25% of listings have outdated data

•  Zomato lists ~18000 restaurant businesses in London with information like menus, pictures and map co-ordinates

•  80% listings have menus which are refreshed every 3 months

•  98% listings have accurate co-ordinates

~40% of listings have closed operations

Rich web1.0 content (menus, pics) ✔ ✗ ✗ ✔

10,000 – 12,000

Note: Yelp doesn’t display the number of listings it has but classifies as nightlife/ restaurants/ pubs/ etc. Since there is an overlap within these classifications, we have indicated a range.

Depth (3 of 3): Zomato has an active user base generating additional content on the platform

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B

Users can write reviews, create wishlists, mark favorites and recommend restaurants to their social networks. Each city has a Foodie leaderboard with different levels of foodies – Foodie, Big Foodie, Super Foodie & Connoisseurs

•  More than 1 million user registrations

•  More than 2 million mobile app downloads

•  More than 300K user reviews

•  More than 1 million user ratings for restaurants

Web 2.0

Overall, the quality of the product along with the depth of information makes a killer winning formula

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Frequently featured by Apple, Microsoft, Blackberry on their App Stores

Won the NDTV Gadget Guru “App of the Year” award in 2013

Upstart digital start-up Zomato blitzes London's ultra competitive restaurant listings sector.

-  Huffington Post

Zomato on the web is growing very fast; the content on the website is consumed by 6 million people every month

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Note: As of August 2013, web traffic is expected to cross ~6 million visitors per month. Including mobile apps traffic as well, the total visitors on Zomato are approximately 12 million per month

2,000,000

4,000,000

6,000,000 Monthly Visitors

Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13

* Spurt in traffic for New Year’s eve

Zomato on mobile is also growing very fast – we see ~6 million visits per month

from our mobile apps

~ 9% growth m-o-m

How do we drive traffic to our product?

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Customer trial happens through all these mechanisms;

Customer retention happens due to content and product quality

SEM

Search Engine Optimization

PR activities

Word of Mouth

OEM/Telco tie-ups

Social Media

BTL marketing

Note: BTL advertising includes outdoor branding initiatives, such as stickers, restaurant tent cards, public place hoardings, etc.

Direct traffic is a very healthy portion of our overall web traffic

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Aug/12 Sep/12 Oct/12 Nov/12 Dec/12 Jan/13 Feb/13 Mar/13 Apr/13 May/13 Jun/13 Jul/13

WebDtrafficDbyDsources

DirectDTraffic Non/paidDSearchDTraffic PaidDSearchDTraffic ReferralDTraffic

Non/paidDsearch:D68%

Direct:D21%

Paid search:D8%

Non/paidDsearch:D77%

Direct:D16%

PaidDsearch:D3%

We bring it all together and translate all this into real business value

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When we have critical mass of traffic in a city

…we have a feet-on-street sales team and

When do we generate revenue?

What do we sell?

Display Ads

Hyper-local search

Display ads on hyper-local search pages

50

100

150

200

Jun '12 Sep '12 Dec '12 Mar '13 Jun '13

Average number of monthly visitors per restaurant

So what do the economics of a city look like? Let’s deep dive into Bangalore as a case study (1 of 5)

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Critical mass of traffic

Monetization value chain

Increasing Feet on Street

Client acquisitions

Revenue generation

Efficiency/Productivity

Bangalore dissected

Web only

2

4

6

8

10

Number of Sales Employees

Jun '12 Sep '12 Dec '12 Mar '13 Jun '13

So what do the economics of a city look like? (2/5)

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Client acquisitions

Revenue generation


Bangalore dissected

Two senior people pulled out to scale Dubai sales team

50

100

150

200

Number of Clients (monthly)

Jun '12 Sep '12 Dec '12 Mar '13 June '13 Jul '13


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Client acquisitions

Revenue generation


Bangalore dissected

1.0 Mn

2.0 Mn

3.0 Mn

Monthly Revenue (INR)

Jun '12 Sep '12 Dec '12 Mar '13 June '13 Jul '13


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Client acquisitions

Revenue generation


Bangalore dissected


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Client acquisitions

Revenue generation


Bangalore dissected

1.0

2.0

3.0

4.0

Jun '13

Revenue/Cost

Multiplier

3.7

Revenue multiplier per sales person

Bringing it all together, everything depends and follows our ability to generate traffic on the website

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Bangalore dissected

100

200

300

Revenues

Restaurants

Traffic

June '12 Sep-12 Dec-12 Mar-13 Jun-13

No. of Sales persons

Clients

Monetization value chain: How it all comes together

Note: All data points indexed to 100 for June 2012

We have demonstrated repeatability of this model in new markets as well (case study for Dubai)

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Dubai

500

1,000

1,500

No. of Sales personsClients

Restaurants

Traffic

Dec-12 Mar-13 Jun-13

Revenues

Dubai 11 Sales people 106 Clients in 9 months

Monetization value chain: Coming together in a new market

Note: All data points indexed to 100 for December 2012

Our traffic has been growing across all markets, old and new…

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0

2,000,000

4,000,000

6,000,000

Jan-13

Delhi

Mumbai

Bangalore

Hyderabad

Others

3,030,958

Jul-13

Delhi

Mumbai

Bangalore

Dubai

Manila

Pune

Others

5,653,554

Dubai

Pune

Hyderabad

London

Note: This is the monthly traffic (web visitors) from each of the given locations

…followed by our revenue which is on an equally exciting trajectory

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0

100

200

300

400

Annual Revenues (INR Mn)

2010-11

3

2011-12

21

2012-13

122

2013-14(P)

320

0

500

1,000

1,500

Number of Clients (Monthly)

July 2011

140

July 2012

410

July 2013

1,500

Current monthly run rate of INR 22 Mn

(August 2013)

International locations are adding to traffic as well as revenue very rapidly

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-

4,000,000

8,000,000

12,000,000

16,000,000

20,000,000

24,000,000

28,000,000

Revenues: India & International

International IndiaAmounts in INR

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Traffic: India & International

International IndiaMonthly visitors

Sales team economics have consistently gotten better in all our markets

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2

4

6

Delhi

5.5

Bangalore

3.5

Mumbai

2.6

Pune

3.7

Kolkata

3.1

Hyderabad

3.1

Chandigarh

1.7

Chennai

1.3

Dubai

1.5

Ahmedabad

0.9

Each column shows the multiplier of: Revenue per sales person in the city

vis-à-vis Cost (salaries) per sales person in that city

> 12 months < 12 months

Time period since

Zomato’s launch

in the city

Also, we have maintained a fairly stable ARPU over time

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INR

Note: Dubai is at an ARPU of Dhs 2,100 at the moment

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Bangalore Delhi NCR Mumbai

Our advertisers see great value in what they buy from us

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Mass Reach ~15 M visitors every month

Accessibility

Available on web and all mobile platforms

Targeted Advertising

Hyper-local, relevant search results

Value for Money More economical than traditional medium

Call Tracking Zomato user calls routed through an internal system with recording feature

Analytics

Easy to track traffic, visits, and return on investment

Why do our advertisers pay us? Why do they keep paying us?

“We find that Zomato is a great way to showcase the wide variety of cuisines and ambience on offer to our potential audience.”

-  JW Marriott

Zomato is the only content/ media platform which tracks ROI on ad-spend; we do this using call-masking

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Zomato Telephone numbers displayed on our platforms for

client restaurants are masked numbers

ACD (Automated Call Distribution) Each masked number is mapped and forwarded to

the corresponding restaurant

•  Call logs for incoming calls

•  Calls recorded for later reference, and for client’s internal system checks

•  Incoming phone numbers stored and shared with restaurants to keep log of frequent visitors

Restaurants get calls on their usual phones

Calls are recorded, and call analytics are used by Zomato to generate regular call reports

(Shared with client restaurants to demonstrate ROI on their advertising spend)

Key Features of Call Masking

Calls per paying restaurant have increased over all our cities; proves the strength of the underlying business model

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0"

20"

40"

60"

80"

100"

120"

140"

Jul+12" Aug+12" Sep+12" Oct+12" Nov+12" Dec+12" Jan+13" Feb+13" Mar+13" Apr+13" May+13" Jun+13" Jul+13"

Bangalore" Delhi"NCR" Dubai" Mumbai"

We want to take Zomato to 40 more cities across 18 more countries

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Present in 8 countries

Target for Nov 2013

Vision 2015

List of under-served and low competition countries Zomato aims to go to

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•  Latin America (potential topline in $M) o  Brazil (~$50M)

o  Argentina (~$20M) o  Chile (~$8M)

o  Colombia (~$4M) o  Mexico (~$20M)

•  Europe o  Turkey (~$15M)

o  Russia (~$20M) o  Germany (~$20M)

o  France (~$10M)

o  Spain (~$10M) o  Italy (~$10M)

o  Eastern Europe (~$10M) o  Scandinavian countries (~$20M)

•  ANZ o  Australia (~$30M)

•  Asia o  Indonesia (~$15M)

o  Malaysia (~$10M) o  Vietnam (~$4M)

o  Thailand (~$4M) o  Korea (~$10M)

o  China? •  Middle East

o  Egypt (~$5M)

o  Saudi Arabia (~$2M) o  Kuwait (~$2M)

o  Jordan (~$2M) o  Oman (~$2M)

•  Current presence o  India (~$20M)

o  UAE (~$15M) o  United Kingdom (~$40M)

o  South Africa (~$10M) o  Philippines (~$8M)

o  New Zealand (~$4M) o  Qatar (~$4M)

o  Sri Lanka (~$2M)

Potential topline: ~$350M+

TEAM

Who are the people behind Zomato?

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Name Role Credentials

Deepinder Goyal Founder & CEO IIT Delhi, Ex-Bain & Company

Pankaj Chaddah Co-founder & COO IIT Delhi, Ex-Bain & Company

Gunjan Patidar CTO IIT Delhi

Albinder Dhindsa VP, International Operations IIT Delhi & Columbia University

Surobhi Das VP, Content IIM Ahmedabad, Ex-Bain & Company

Upasana Nath VP, Recruitment Ex-Google

Saurabh Sengupta VP, Business Development IIT Delhi & IIM Indore, Ex-Aon Hewitt

Puneet Singh Arora VP, Finance & Operations IIM Calcutta, Ex-E&Y, Ex-MakeMyTrip

Pramod Rao Head of Europe Operations IIT Kharagpur, Ex-Bain & Company

Rohin Thampi Head of Middle East Operations IIM Ahmedabad

Mridul Anand AVP, Content IIM Calcutta & IIT Delhi

+ 400 more

BACK UP

This business model is highly repeatable in terms of traffic and revenue

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50

100

150

200

0

50

100

150

200

Jun-12

100

Sep-12

139

Dec-12

156

Mar-13

148

Jun-13

171Delhi Mumbai

Pune Hyderabad

0

100

200

300

0

100

200

300

Jun-12

100

Sep-12

147

Dec-12

185

Mar-13

181

Jun-13

213

Bangalore

0

100

200

300

0

100

200

300

Jun-12

100

Sep-12

113

Dec-12

166

Mar-13

204

Jun-13

196

0

50

100

150

200

0

100

200

300

Jun-12

100

Sep-12

153

Dec-12

131

Mar-13

150

Jun-13

171

0

100

200

300

400

500

0

100

200

300

Jun-12

100

Sep-12

156

Dec-12

219

Mar-13

238

Jun-13

454

Monthly Revenue Index

Monthly Traffic Index Note: All data points for each city indexed to 100 for June 2012

Content and user engagement – listings; reviews and ratings per listing

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City% #%of%lis+ngs% Ra+ngs%per%lis+ng% Reviews%per%lis+ng%Mumbai" 10766" "17.4"" "4.1""

Delhi"NCR" 10355" "28.5"" "6.8""

Bangalore" 4872" "28.0"" "8.4""

Pune" 3770" "19.5"" "5.8""

Chennai" 3455" "13.1"" "3.0""

Hyderabad" 2708" "19.5"" "5.2""

Kolkata" 2615" "23.9"" "8.1""

Ahmedabad" 1965" "11.6"" "2.9""

Jaipur" 1525" "6.9"" "1.4""

Chandigarh" 1163" "16.6"" "3.7""

Indore" 1007" "4.4"" "0.8""

GuwahaR" 666" "4.9"" "0.3""

Lucknow" 664" "10.9"" "2.8""

Ludhiana" 494" "7.9"" "2.1""

London" 17974" "2.2"" "0.3""

Metro"Manila" 11576" "5.5"" "0.4""

Dubai" 5147" "9.4"" "1.6""

Johannesburg" 2318" "7.9"" "1.6""

Abu"Dhabi" 1666" "6.0"" "0.5""

India"

Major"Int’l"

Cap table as of 30 August 2013

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Deepinder Goyal, 24.30%

Pankaj Chaddah, 8.10%

Gunjan Patidar, 1.70%

Friends & Family, 0.70%

Info Edge, 57.80%

ESOPs, 7.40%

Current Shareholding Structure

Documents

Zomato: Investor Deck - Sequoia Capital India