Zomato is already the largest food delivery and restaurant discovery company in India which has changed the way millions of Indians order food on a daily basis. Zomato has managed to make the business of ordering food so easy and comfortable through the ability to search restaurants that are near your home, up to having the hot food right at your door.
The business model is established on the basis of matching hungry customers and restaurants through tech establishment and value creation for all parties. Zomato currently runs in more than 800 cities in India and has gained a brand name that is very much relied on by people in their daily food requirements. Knowing the Zomato business model will enable us to realize how an original restaurant listing site grew and transformed to be a multi-billion dollar food-tech company that is transforming the Indian way of life.
History of Zomato
Founder & Team
The co-founder and CEO of Zomato, Deepinder Goyal, has spearheaded the transformation in the company, as she has a dream to make it easier to order food for every person. He created a team that is technology-oriented and aims at solving real-life issues with his co-founder, Pankaj Chaddah, who exited in 2018. Zomato saw its transformation into a proper food delivery company under the leadership of Goyal, who transformed it into a restaurant listing site. The professional management team of Zomato has improved the growth and productivity of the competitive food-tech scene in India by managing the operations of more than 4,400 employees and thousands of delivery partners today.
Role of Leadership in Zomato’s Growth
Deepinder Goyal has been a critical leader of Zomato business model. He created an innovative culture where new ideas were tested at all times. Gold memberships, cloud Kitchens, and strategic acquisitions were all attempted. He is customer-oriented, and this has led him to invest in the technology, increase speeds in delivery, and improve the quality of food. Zomato managed to maintain the startup-level agility, although the expansion was very fast. The transparent and open communication Goyal exhibited on social media generated trust and transparency so that Zomato is not just a service but a brand that people have a personal attachment which makes them emotionally attached to the brand.
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Key Milestones
- 2008: Deepinder Goyal and Pankaj Chaddah got Foodiebay going as a restaurant listing site in the area of Delhi NCR, renamed Zomato.
- 2010: The company changed its name to Zomato and found itself within expandability to other cities in India, marking the first step to growth nationally.
- 2012-2015: Zomato became global, releasing products in 23 countries, such as the UAE, UK, USA, and Australia, and became a food-tech player worldwide.
- 2015: Zomato introduced food delivery in India, which transformed the business model of Zomato from a discovery to a transition business.
- 2018: The company bought Uber Eats India at a price of about 350 million. This injected the company with a substantial market share and consolidated the food delivery market.
- 2019: Zomato launched Hyperpure, its B2B supply chain through which fresh materials are delivered to restaurant partners.
- 2021: Zomato was listed as a publicly-traded company by means of an IPO and raised INR 9,375 crore and received a valuation of above INR 60,000 crore.
- 2022: Zomato bought Blinkit (previously Grofers) in INR 4447 crore to venture into the quick commerce groceries delivery market.
- 2024-2025: Zomato was profitable because its Profit After Tax value was INR 1,155 crore, indicating that the business model of operation is sustainable.
Zomato Business Model Explained
Overview of Platform
The Zomato business model takes the form of a three-sided market, which includes customers, restaurants, and delivery partners. It is beneficial to all of them as customers are offered convenience and choice, restaurants get more and more users with access to a large audience, and delivery partners receive flexible incomes. The platform comes full of powerful technology to customize their listings of restaurants, offers, and even delivery times. The intelligent algorithms deal with order matching, route optimization, and demand forecasting. As a digital-first model, Zomato uses data insights to boost end-user experience and is continually building on the efficiency of its platform.
Core Segments
- Food Delivery (≈60% revenue): Core of Zomato’s business. Users order from thousands of restaurants via the app, with real-time delivery supported by route optimization and a network of delivery partners. Revenue comes from restaurant commissions (15–25%) and delivery fees, with surge pricing during peak hours.
- Restaurant Advertising & Subscriptions (≈20% revenue): Restaurants pay for premium listings, Google ranking, featured banners, and analytics tools. Low operational costs make this segment highly profitable while boosting restaurant exposure and orders.
- Zomato Pro / Gold (≈10% revenue): Membership program offering exclusive offers, free delivery, and dining benefits. Encourages higher spending, repeat orders, and strengthens customer loyalty.
- Hyperpure: B2B supply chain service launched in 2019, delivering fresh produce, packaged food, and kitchen supplies directly from suppliers to restaurants. Enhances restaurant relations, ensures quality, and contributes to Zomato’s revenue growth.
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Zomato Revenue Model/Streams | How Zomato Earns Money
Zomato business model has 3 main sources of revenue, and therefore is not centralized on one source of revenue. Such diversification has been invaluable towards the firm become profitable.
- Food commission: The highest source of revenue, with a contribution of about 60 percent of total revenue, is the commissions charged to the restaurants on each order. Zomato normally applies commissions on the values of orders of 15-25%. To illustrate that, when a customer orders food with 500, Zomato will get 75-125 commission from the restaurant.
- Delivery Costs: Customers get varying costs with [?]0 to [?]50 of delivery costs based on distance and order, and demand terms. These charges directly go to the Zomato revenue and help to offset the delivery cost. These fees are raised in times of peak activity or in less densely populated areas through dynamic pricing.
- Restaurant Advertising: Restaurants are paying Zomato in a bid to appear more advanced in ranking, featured, or to conduct promotional campaigns. It is a high-margin business that makes the company about 20 percent of the revenue because the requirement is modest operation expenses compared to food delivery.
- Zomato Pro Subscriptions: Pro plans are available that bring about 10 percent of aggregate income in the shape of monthly or yearly subscriptions. The members contribute between [?]149 and [?]299 per month in benefits such as free delivery and special offers. This generates recurrent forecasted earnings.
- Hyper pure Sales: B2B supply chain is a business model that brings income by selling ingredients and supplies to restaurants. This segment, though it only brings in revenue of about 5 percent now, is expanding as more restaurants are onboarded and new types of products that are served by Zomato are increasingly added.
- Quick Commerce (Blinkit): Zomato became an investor in the delivery of groceries and essentials to people, which until recently of a recent turnover was approximately 5% after spending money on buying Blinkit. Blinkit is a grocery service delivered within 10-15 minutes based on the product pricing and addition of delivery prices as a revenue base.
- Event Ticketing (District): Zomato makes commissions on everything ticketing as part of the dining experience, events, and activities through Communicated by District, its event discovery and ticketing service. It is a minor, yet increasing stream of income.
The Zomato business model has an ideal way of matching the above revenue streams to minimize risk. In case there are difficulties in food delivery, the business can be underpinned by other markets. This is one of the areas of diversification that has made Zomato able to survive in competition.
Zomato Revenue Breakdown Over the Years
- FY 2022: After the pandemic, revenue shot up to [?]6,948 crore. This is the year that Zomato became public and financed its operations through the acquisition of Blinkit. Emphasis was put on sustainable growth and profitability.
- FY 2023: Revenue has grown to [?]8,718 crore through enhanced unit economics. Zomato minimised losses by streamlining the operation processes, growing average order values, and enhancing efficiency in delivering the highest quality services to customers.
- FY 2024-2025: The revenue grew by [?]13545 crore compared to the previous year, or 56 percent. Even more importantly, Zomato published a profit of [?]1,155 crore PAT, which is indicative that the Zomato business concept can extend over an extended period and produce sustainable profits.
This revenue trend demonstrates the fact that Zomato was developing a different curve of turnover from a loss-making business that existed solely on growth, to a company that makes high profits with multiple channels of revenue. The Zomato business model was well sorted out, with growth and financial discipline.
Growth Strategy
The achievements of the Zomato business model have been partly due to smart growth strategies, which have enabled the company to grow faster and achieve market leadership.
- Branching to Tier-2 and Tier-3 cities: Zomato focused very intensely on expanding outside the metro cities to the Tier-2 and Tier-3 towns when the competition was less developed, and the customers needed easy access to food delivery.
- Strategic deals (e.g. Uber Eats India): Purchasing Uber Eats India neutralized one of the biggest competitors in one day and provided Zomato with non-trivial access to new clients and restaurant acquaintances, with them firmly cementing their oligopoly.
- Investment in innovation: AI recommendations, real-time tracking: To keep providing added value to its customers and serve them whenever they want, Zomato has invested in AI to ensure that it goes the extra mile in its efforts to serve its customers with a view of growing its business continuously.
- Diversification: Cloud kitchens, B2B supply chain, and high-end services: The Zomato business model had an addition of cloud kitchens (cooking facilities merely to make a delivery), and Hyperpure supply chain, and high-end dining.
These techniques assisted Zomato in expanding in numerous cities to more than 800 cities in India, with millions of customers receiving services each day, and being ahead of the competitive food delivery market.
Marketing Strategy
Zomato promotional activities have been vital in instilling brand awareness and customer preference, in accomplishing the entire Zomato business concept.
- Social media and influencer marketing: Zomato has become well-known due to developing viral posts on its social media channels that can be shared and liked, emotional posts that develop organic advocates and affection of the brand, without huge investment in advertising expenses.
- One should also increase repeat purchasers by putting into place loyalty programs (Zomato Pro): Pro membership signals exclusivity and gives loyal customers benefits that will induce them to place more orders with Zomato.
- Focus as innovative, customer-friendly, and reliable: Consistently communicating and providing quality service placed Zomato in a position of an authoritative brand that is concerned about customer satisfaction and meets promises.
- Local promotions and seasonal campaigns: Zomato operates location-based promotional campaigns that glorify the local festivals, dishes, and local cultural events, and therefore make the brand interactive and relatable with different people in India.
These marketing approaches have turned Zomato into a household name, and it provided emotional attachment among customers that cannot be measured with money to the Zomato business model.
Financial Highlights
The financial performance of Zomato demonstrates the power of Zomato business model and its position in the market.
- User base, orders/month, market share Zomato has covered more than 50 million active users who place about 100 million orders monthly, which also commands an estimated 45 per cent market share in the Indian food delivery industry.
- Up until going public, Zomato had amassed more than 2.4 billion dollars in investor capital, which included Ant Financial, Temasek, and Tiger Global, and had a valuation of over 5 billion dollars privately.
- Zomato was privatised in July 2021 at an auction price of 9,375 crore at a valuation of more than 60,000 crore, becoming one of the largest Indian-based tech IPOs at the time.
- Zomato has a few hurdles in its future as the company recorded adjusted EBITDA of 372 crore and PAT of 1,155 crore in FY24, indicating that the Zomato approach has the potential to earn sustainable profits and may grow further.
Zomato vs Swiggy – Key Differences
Zomato has ventured into the quick commerce (Blinkit), dining-out (District), and B2B supply (Hypermart) sectors, and Swiggy has two main areas of interest in food delivery and Instamart grocery delivery.
- Profitability: Zomato made a profit earlier than Swiggy, better unit economics and operational efficiency in the Zomato business model.
- Technology Focus: Zomato allocates greater resources to making use of AI and machine learning to personalize the uses on the one hand and swiggy but ensures customer satisfaction as well as fast delivery on the other hand.
- Brand Personality: Both Zomato and Swiggy have bold and witty marketing and a strong presence on social media; however, Zomato focuses on being reliable and customer-oriented, whereas Swiggy is a more conservative corporation.
Whereas Swiggy operates only in the Indian market, Zomato is present in the international markets, and therefore, the business model of Zomato is more internationally sensitive.
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Challenges & Learnings
The Zomato business model has not been without its difficulties after the success, although some of them appeared as a good lesson:
- Expensive operations: Being the provider of a delivery network associated with thousands of partners, optimization of logistics and quality assurance cannot be achieved immediately, and it is challenging to make a profit on a large scale. Zomato was taught how to weigh between growth and efficiency.
- Severe competition: Rivalry with Swiggy will create unceasing price wars, discount fees, and margin strain, and that compels Zomato to be a continual innovator and restart on service quality instead of fighting over pricing actively.
- Relations with delivery partners: It can be seen as a continuous concern to make sure that the gig workers are fairly rewarded and provide quality services at a reasonable cost, as it always demands proper consideration of the policy design and relations management.
- Regulation issues: Food safety concerns, the issues concerning the classification of delivery partners, data privacy, and local regulations technicalities bring complications to compliance that Zomato needs to address with caution in both the states and the cities.
- Customer acquisition expenses: With discounts and offers, acquiring new customers is costly, and it needs outstanding services to persuade customers to make a repeat purchase,e which is something that Zomato is currently learning.
These are some issues that influenced the way the Zomato model of the business improved by being robust, efficient, and customer-oriented in the long term.
Conclusion
The Zomato business model is rather impressive due to its evolution and flexibility. The company did not simply remain dealing with the activities of food delivery but has extended its operations to include subscription, B2B supply chains, quick commerce, and dining experiences. Such a diversification minimized risk and provided more than one source of revenue that is mutually determining.
India has a better perspective on how the business model will succeed in leveraging its active digitalization, rising disposable income, and its shifts in lifestyles. Zomato can enjoy the fruits of this growing number of Indians finding it easier to order food online and have it delivered. The investments in fast commerce, cloud kitchens, and dining experiences by the company present new grounds of expansion, other than traditional food delivery.
FAQs
1. What is the Zomato business model and how does it work?
The Zomato model is a three-sided marketplace that connects customers, restaurants, and delivery partners via a technology platform. The clients search restaurants using the Zomato app, the restaurants take their orders and pay Zomato a commission (usually 15-25%), and the delivery agents pick the food and deliver to their customers, charging delivery and delivery fees respectively.
2. How does Zomato make money and what are its main revenue streams?
Zomato also earns revenue in several ways. The biggest (approximately 60%) origin is commissions to the restaurants for each food delivery order. Delivery charges are also paid, and act as a revenue collector by the customers. In the restaurant advertisement and sponsored listing, about 20 percent of the revenue is produced. The proportions of Zomato Pro subscriptions are approximately 10% of the fees made up of the subscriptions.
3. What makes Zomato different from competitors like Swiggy?
Even though Zomato and Swiggy provide an equal platform for food delivery services, there are various aspects that distinguish the two companies. Zomato has gone well beyond that with quick commerce (Blinkit), dining experiences (District), and B2B supply (Hyperpure) whilst Swiggy specializes in the food delivery sector and Instamart. Zomato has demonstrated optimistic unit economics and made a profit earlier.
4. How did Zomato achieve profitability, and is it sustainable?
Zomato was also able to reach profitability in FY24 by concentrating on a few critical areas. First, it enhanced unit economics, times by better distributing average order value and reducing the cost of delivery by increasing route optimization and technology. Second, Zomato minimized the cost of customer acquisition by creating loyalty with Zomato Pro and targeting returning customers instead of acquiring fresh ones by virtue of being in business constantly.
5. What challenges does Zomato face, and how does it overcome them?
Zomato is able to experience a number of challenges. Strong competition against Swiggy implies competition on a price and a regular basis, which Zomato deals with customers’ experience and technology development instead ofa mere price war. Robert’s mobile handles the high costs of operation of the delivery networks by almost maximizing the route optimization, automation, and attaining a state of economies of scale.