One of the most popular Seattle-made apps is no more. After more than 30 million downloads, local company Urbanspoon has been gobbled up (for a second time since its launch), and its new owner, Zomato, has decided to swallow hard and discontinue the name.
The buyers are a pair of internet entrepreneurs from India, Deepinder Goyal and Pankaj Chaddah. As colleagues at the New Delhi offices of private equity firm Bain & Co., they launched Zomato at about the same time that Urbanspoon got off the ground in Seattle less than a decade ago. Within a few years, the company had raised over $150 million in funding from Silicon Valley's Sequoia Capital, and established itself as the leading restaurant search tool in 20-some countries outside the US.
When they looked at North America, though, they saw both opportunity and a hornet's nest of competing apps. Urbanspoon, the oldest, started small (and local: just serving Seattle) but soon became part of tycoon Barry Diller's $3 billion global communications and entertainment empire, IAC Interactive, before its sale to Goyal and Chaddah. On top of that, there are plenty of players in the niche of crowd-sourced restaurant searches: Zagat, OpenTable, Foodspotting, GrubHub, TripAdvisor, and many, many more. Plus a loose cannon, Yelp, that now promises to deliver whatever dish your tummy growls for via its Eat24 affiliate.
The tech world tells us that it's often easier to buy than to build. So Goyal and Chaddah wrote a check for $60 million and moved into the elegant Urbanspoon offices on Eastlake. For a few months, they just tinkered, but this week they've pulled the plug on Urbanspoon.com and migrated everything over to Zomato. Perhaps recognizing that the transition could be jarring for users, they threw out a new logo they'd just unveiled only months previous, and created a new one that apes many aspects of Urbanspoon's.
What's gone for good is the signature spinning slot machine function of the Urbanspoon app: you could select price, cuisine, and location, and you'd get a roster of nearby taco stands, or pizza parlors, or burger bars. In the early days, it was a groundbreaking marriage of tech and taste. But the lead didn't last long.
Along the way, Urbanspoon added a reservations function, Rezbook. However, it couldn't make headway against OpenTable, which was purchased by behemoth Priceline for $2.6 billion, and eventually sold Rezbook to its competitor.
Meantime, the biggest and least predictable dog in the yard – Yelp –moved aggressively into searches based on online reviews, protected by court decisions that permitted anonymous posts. Foursquare built its business model on “finding nearby friends.” Google started running reader reviews, as TripAdvisor had already been doing for some time. Groupon, as always, muddied the waters by allowing cheapskate diners to complain about poor service.
Whether Urbanspoon's user base will convert to the new site is a risk that Zomato decided to take. There's no question that they will lose “brand equity,” but they're hoping that the cleaner, more intuitive interface on Zomato may entice users to make the switch.
Zomato's move comes during an eventful week in the local food-related app space. Clint and Lisa Sharples, Puget Sound entrepreneurs who founded Garden.com and later headed up AllRecipes.com and Cheezburger.com, have announced the purchase of two food-related sites – SeriousEats and RoadFood – which they will run from offices on Mercer Island.