Zomato's buying spree continues: Co acquires Turkey's Mekanist in all-cash deal

Just two weeks after Delhi-based online restaurant search service Zomato entered the US with a big bang, the company today marked its seventh acquisition in the last six months by buying out Turkey’s prominent restaurant discovery portal Mekanist in an all-cash deal. The move will help Zomato almost double its restaurant coverage  from about 27,500  in Istanbul and Ankara to more than 50,000 restaurants across Turkey.

“Mekanist has established itself as one of the heavyweights in the online restaurant search and discovery space in Turkey. We’re excited to be joining forces with them as we continue to grow in one of our most important markets. Mekanist is one of the first and most successful tech startups to emerge from the Turkish startup ecosystem,” said Goyal in a statement.

The acquisition comes close on the heels of Zomato sealing its sixth acquisition, which also happened to be its biggest, of restaurant information and table booking property Urbanspoon in the US for $52 million (Rs 325 crore).

In November last year, Zomato had raised $60 million in funding at a pre-money valuation of $600 million from existing investors Info Edge (India) and Sequoia while adding Vy Capital as a new investor. A bulk of this was used to seal the deal with Urbanspoon. And if reports are to be believed, Zomato is  is planning to raise another $80 million from existing and new investors.

But today’s acquisition comes as a surprise as in an analyst conference call last week, Deepinder Goyal, the founder and chief executive of the company had clarified that  the funds would be used for strengthening its focus on existing markets rather than making new acquisitions.

“No more acquisitions on the cards for now. There’s no new geography in mind. We will focus on the existing geographies and strengthen our presence there,” Goyal was quoted as saying in the Business Standard.  

More importantly, Zomato requires the funds to increase field staff in specific American cities and boost its marketing spend in Australia, where Urbanspoon is a market leader,  ahead of the cricket World Cup starting in February.

Founded in 2008, Mekanist’s acquisition comes just a little over a year after Zomato launched its operations in Turkey. Zomato launched in Turkey in November 2013, making its website and apps available to users in Turkish and English. Mekanist has over 190,000 listed establishments along with over 500,000 reviews from its 1.5 million signed-up user base on web and mobile.

Post the acquisition, Zomato will cover over 50,000 restaurants in Turkey, serving users over 3 million times a month as all of Mekanist’s traffic and restaurant-related content will move to Zomato. Restaurant businesses too will  be able to use Zomato’s hyperlocal advertising model, and target customers searching for restaurants in and around their location.

Zomato also recently acquired local dominant restaurant search players in New Zealand, Poland, the Czech Republic, Slovakia, and Italy and is present in 22 countries with a listing of over a million restaurants globally. To date, it has raised  more than $113 million, over multiple rounds of funding from investors including Vy Capital, Info Edge and Sequoia Capital with a valuation of about $660 million.