Zomato buys NexTable – Aiming to move into Australia

Date: 23-04-2015

Zomato Book – The new online booking system coming to Australia.

Zomato, the recent acquirer of Urbanspoon,  has now acquired US based NexTable, and a cash and stock deal for an undisclosed amount.  Zomato recently raised US$50,000,000 and is valued at over $1 billion.

The deal will see NexTable renamed Zomato Book and the team from NexTable will come across to Zomato.  Zomato has stated that they intend to launch in the UAE, India and Australia first because that is where they have strong customer bases.

Since raising funds, Zomato has been on a buying spree, purchasing 9 businesses in the last 9 months and now works with Restaurants in 22 countries.

Zomato Book to be created out of NexTable
Zomato Book to be created out of NexTable

Zomato acquiring NexTable – What does it mean for your Restaurant?

Zomato is certainly moving ahead with their aggressive plans to be the one stop shop for recommending and monetising Restaurant transactions.  They recently acquired MapleGraph and have renamed it Zomato Base.  This is a POS System.  The acquisition of NexTable – to become Zomato Book, leaves just Online Ordering as the last main piece in their efforts to monetise all of the functions of a Restaurant.  They currently have 22 positions open in Australia.

CEO of NexTable, TC DeSilva stated one of the reasons for the sale to Zomato was the difficulty in building a sales force to scale the business out.  The costs of running a large salesforce is hopefully going to be recoup by Zomato by monetising every booking ad every online order that they take.

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Many of these costs will either need to be passed onto the consumers or be absorbed by the Restaurants.  The question will be whether they can achieve the scale required before the investment funding dries up.  The creation of a digital monopoly means that companies can increase fees easily, which is why Restaurant companies trade on such high premiums, but I think the fundamental question is can a Restaurant survive being off the grid, outside of all of the aggregators and so far, we have seen some Restaurants being very successful by doing great marketing for the Great Food, Great Value and Great Experiences that their deliver at their Restaurants.

The roll out of Zomato Book may not be far off.
Zomato acquires NexTable

What does it mean for Dimmi?

This is obviously a continuation of the issues that have befallen Dimmi in the last 4 months, which has left the question about whether it will be acquired by Opentable?  Zomato Book includes a Table Management system which will go head to head against Restaurant Diary, which Dimmi resells from Resdiary in the UK.  We think that Dimmi has tried to reengineer it’s business model to become a reseller of Restaurant Diary, but this move will continue to put pressure on Dimmi.

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