Dineout acquisition deal valued at $10 million, founders tell their tale
Dineout is a Delhi-based table reservation startup that was initially one of our WebSparks, and most recently was in the news because of the TimeCity acquisition.We wrote about Dineout getting acquired by TimesCity a couple of days ago at which point the amount was not disclosed. We have at least two sources who have confirmed that the deal is valued at about $10 million on milestone basis. The company was founded by Ankit Mehrotra, Sahil Jain, Nikhil Bakshi and Vivek Kapoor.
The founders have declined to comment on the amount, but opened up about their journey in a conversation with YourStory.
YS: When you had started the venture, what outcome did you envision?
Dineout: It all started with a phone call I made to my Co-founder Sahil Jain. Having just returned from a holiday in Delhi, I was sitting at my desk at a top Investment Bank in London, staring at the Bloomberg screens and looking at countless charts and graphs. Looking back at my trip, I realized that every time I went out to dine with my friends in Delhi, it was to the same places I had already been to. Sharing this with Sahil, I figured this was due to a number of reasons, but mainly because of a lack of information about a new place; reluctance of my friends to try a different place for fear of being let down; and probably the most important, lack of a truly unique, independent website which a person could use to find out where to dine in the city.
Sahil had also faced similar situations and we began thinking on similar lines. The thought on our minds was, ‘why don’t we try to change this?’
Thus began the long and arduous journey!
When we had started up, we had never believed nor would have probably wanted such an exit after two years. In fact, we had raised a round of funding earlier and were about to close on another round of funding. Opentable is considered the poster child of online restaurant reservation. And our vision was to build something similar for India. This is what we had set out to do two-and-a-half years ago. And one of the main reasons that we went ahead with this deal was that we still got to realize our vision. The way the deal has been structured, we will continue to operate as an independent unit within Timescity and we look forward to creating the largest table reservation service in India.
YS: How long did the entire acquisition process take? What was your thought process during this time?
Dineout: Our deal took nearly six months to finalise. I still remember very clearly that it all started with a very casual conversation between the two teams. In one of our regular meetings with TimesCity, we (Sahil and I) were introduced to Miten Sampat, Business Head of TimesCity, for the first time. Right from the word go we were highly impressed with Miten and his vision of delivering a full service experience from discovery to destination for the TimesCity brand.
I guess he was equally impressed with us and what our team had managed to accomplish -- we had built a great platform that enabled consumers to save time, money, and get a special experience every time they dined out.
One thing led to another, until one day, Miten made an offer to acquire us and merge the two entities. Stunned, we sat there contemplating this huge moment. We had a big decision to make in front of us. On one hand, we were actively looking to raise an institutional round of funding for further expansion and receiving a lot of interest. On the other, we had an opportunity to merge with one of the largest internet companies in the country, and build Dineout faster than we could have ever imagined.
Obviously, no one wants to sell their company which they have built from ground up very early. Especially one that is doing well and getting very good traction. During that time, we also met with COO Gautam Sinha and CEO Satyan Gajwani of Times Internet, to understand their vision and thoughts about the fulfilment business. We were offered to come on board and help build the fulfilment division for Timescity.
As one can imagine, we were in a dilemma. However, what tipped the scale in favour of a merger was our belief that discovery along with fulfilment together helps close the loop for a customer and provides them with an end-to-end experience. And this is exactly the vision that Miten, Gautam and Satyan had.
After countless sleepless nights trying to understand what’s best for Dineout, its team and its loyal customers; speaking to our existing investors and advisors, juggling numerous spreadsheets and documents between lawyers and accountants (lasting nearly six months), we finally merged with Times Internet.
YS: What do you think was the most critical thing that TimesCity liked?
Dineout: Dineout as a platform has grown considerably since its launch. Currently, we are seating approx 18,000-200,000 diners across our 450+ restaurants and have seated approx 200,000 diners till date. There are other companies in this domain too; some who claim to be much bigger than us. However, the main and the most important difference between us and our competitors is the fact that we have a contractual agreement with all our partner restaurants and that we have been successful in monetizing this and getting our payments in time from the restaurants. No one else has been successful in doing this.
YS: What happens to Dineout now? What role will the team play?
Dineout: One of the most important deciding factors for us was the promise that we will continue our operations in the way we had been doing till now. So in that respect nothing changes. In fact, this move will help us expand faster across geographies, grow much quicker and also improve our technology and user experience.
Having said that, our focus will also be to enable fulfilment across other businesses of TimesCity. And this is very exciting for us.