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Published on : Jan 14, 2015

Zomato, the online restaurant guide, has made a grand entry into the U.S.by acquiring Urbanspoon, the food portal based in Seattle. The estimated US$60 million deal is expected to pose a threat to industry giant Yelp. 

The acquisition of Urbanspoon only goes to show that Zomato has a rather large appetite for a slice of the American online food industry which has so far been dominated by Yelp. Yelp is currently the world’s largest online food portal. 

The Urbanspoon acquisition is Zomato’s sixth and largest yet and will be an all-cash transaction. Just last week Deepinder Goyal, Chief Executive Officer of Gurgaon, India-based Zomato finalized the deal with the owner of Urbanspoon - InterActive Corp, a digital media firm. Cofounder of Zomato Pankaj Chaddah said that the traffic at Zomato is expected to more than double to reach 80 million visitors. If this happens, it will possibly become the world’s largest restaurant only search company. Zomato was launch as a startup by Chaddah and Goyal who were consultants at Bain & Co. the startup now operates in 22 countries around the world. 

Zomato has boosted its attractiveness amongst investors by expanding overseas in a rather aggressive manner. In the latest funding round, the company was valued at US$660 million. Last year Zomato acquired restaurant search players in five regions: New Zealand, Poland, Czech Republic, Slovakia, and Italy. Sharad Sharma - an angel investor and founder of iSpirt a software product think-tank - said that focusing on expansion is an excellent business strategy for the company being at this stage in its lifecycle.