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When Zomato added food delivery to its restaurant discovery business in 2015, it wanted to one-up Swiggy, which was barely a year old then. Swiggy is now returning the favour by encroaching into Zomato’s old stomping ground—restaurant discovery and reservation. The company is in the process of acquiring table reservation app Dineout, which offers discovery, reservation, and cashless payment services, in a cash-and-stock deal worth between $150 million and $200 million.  

It’s a hefty payout for Dineout’s erstwhile parent, Times Internet. It invested around $50 million into the company, including the $10 million it shelled out for the acquisition in 2014, two years after Dineout was founded. The bigger gainer here, though, is Swiggy, which has plans plans Economic Times Swiggy eyes $800 million IPO early next year Read more  to go public

The restaurant reservations market is worth a mammoth $17 billion, according to a report by the National Restaurant Association of India (NRAI), and Swiggy would be loath to let an opportunity like that go. In 2019, dining out contributed over 75% of the revenue for the food services market—food delivery stood at a mere 7-8%, according to several experts in India’s foodtech industry. Plus, the average ticket size when dining out is around around Restaurant India India sees 20% increase in average transaction value, luxury dining up by 120%: Report Read more  Rs 2,000 ($25) to Rs 3,000 ($40), almost 10X 10X Statista Amount of money spent per food order on food delivery applications across India as of August 2021 Read more  what it is in food delivery. 

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But Swiggy isn’t just buying Dineout for its table reservation business. Restaurant discovery, table reservation, and payments contribute only 15%-20% of Dineout’s overall revenues. What Swiggy’s actually interested in is Dineout’s business-to-business (B2B) offerings. 

Dineout brings with it an end-to-end full-stack offering that provides restaurant management software (Torqus), a customer relationship management platform (InResto), a virtual menu offering (Binge Digital), and events management (SteppinOut). Upselling them to the 20,000 restaurants listed on Dineout’s platform, along with its additional marketing services, bring Dineout another 30-40% revenue. 

With Dineout’s B2B products, Swiggy gets into a restaurant’s nervous system,” says Rajiv Kumar, chief executive officer of food court chain Carnival Foods.

AUTHOR

Bhumika Khatri

Bhumika covers e-commerce, consumer internet, and everything startup for The Ken in Delhi. In her previous stint at Inc42, she spent two and a half years writing about a breadth of startups and topics. A commerce graduate, Bhumika completed her postgraduate in journalism from the Indian Institute of Journalism and New Media, Bengaluru. You can reach her at [email protected]

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