Zomato admits mistake, gears up to fix its ‘outdated’ app

Zomato said its app looked outdated to itself. Photo credit: Pixabay.

Zomato, once a unicorn among Indian startups, has finally gotten around to admitting its mistake – that its will-o’-the-wispish chase of international dominance did more bad than good, making its core platform suffer.

Zomato’s decided to go after personalization – the equivalent of gold to startups trying to create customer stickiness – with a vengeance.

Food tech in India has gone through a fair bit of turmoil, with a number of closures and pivots, but Zomato somehow managed to prevail. That journey, however, has not been without its own battles.

In May, the brokerage arm of HSBC cut Zomato’s valuation to US$500 million, which is about half of what it was valued at when the startup raised funding in September.

“Zomato is present in 23 markets [very early in its journey] and none is profitable, which implies that to address both the investments in last-mile delivery and losses in international operations, fund-raising will be a continuous phenomenon, suggesting current valuations don’t make much sense,” HSBC analysts had then said.

Our own app feels a bit outdated to us

CEO Deepinder Goyal defended his company at that time, and in an email to Tech in Asia, a company spokesperson went on to say that the HSBC analyst “doesn’t obviously understand our business well.”

After all these months, looks like the brokerage’s move is due for some serious validation.

“Over the last two years, we’ve been so busy with our international expansion and our manic focus on winning delivery, that we let the basic USP of our core product – search and discovery – suffer a fair bit,” the company said in a blog post on Tuesday.

“Our own app feels a bit outdated to us, and we’re now beefing up (no pun intended!) our engineering and product teams to get our app back to being one that’s delightfully enjoyable to use and explore.”

Zomato now promises checkout in 21 seconds. Photo credit: Thomas Schweighofer

Personalization has been a key aspect for most consumer-facing startups for a long time now, which makes Zomato’s move curiously late.