Indian startup Zomato acquires US-based rival Urbanspoon
13 Jan 2015
In one of the biggest overseas deals by an Indian startup, restaurant search services provider Zomato yesterday said it had acquired US-based rival Urbanspoon for about $50 million Reuters reported. According to a company executive Zomato was in talks to raise about $100 million in fresh funding.
The last couple of years have seen foreign companies including Japan's SoftBank Corp and Temasek Holdings Pvt Ltd invest billions of dollars by way of funding in India's rapidly growing internet and mobile-based companies.
A number of technology startups had used private equity investments to acquire local peers to boost their presence in a market that boasted the third-largest internet user base in the world, however, overseas acquisitions were rare.
According to Zomato, the acquisition of Urbanspoon, which marked Zomato's entry into the US, Canada and Australia, enables it to cover over 1 million restaurants in 22 countries.
Seattle-based Urbanspoon, earlier owned by media mogul Barry Diller's IAC/InterActiveCorp, competed with Yelp Inc, a popular website that allowed users to review and rate restaurants and other services.
Zomato chief executive Deepinder Goyal told Reuters in a phone interview that it was an all cash deal and the company pretty much had to spend all its last round of funding on this acquisition.
Meanwhile, Business Standard reported that in November 2014, Info Edge (India), through its wholly owned subsidiary had invested an amount of about Rs185 crore in Zomato.
On allotment completion/transfer of shares against the said investment, aggregate amount of investment in Zomato would be about Rs327 crore. Info Edge (India) would hold 55.13 pder cent of the equity share capital of Zomato while the overall holding on a fully converted and diluted basis would remain at 50.1 per cent.
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