The COVID-19 pandemic has had a devastating impact on the restaurant industry. Restaurants, on average, laid off 91 percent of their hourly workforce and 70 percent of salaried employees due to COVID-19 related closures. Estimates indicate the restaurant industry as a whole lost as much as $240 billion in 2020.
Among those hit by the pandemic were restaurant apps like Dineout, India’s largest dining out and restaurant tech platform.
“COVID and the whole crisis was obviously a big challenge for us,” says Dineout Co-Founder and CEO Ankit Mehrotra. “Never before had restaurants completely shut down all across the world. Everything we do depends on consumers visiting restaurants. Two years ago, our revenue was at zero and we laid off one third of the team. We had to regroup and refocus to make our business stronger.”
In a global keynote on November 16, 2022, Mehrotra provided how he helped Dineout recover from the COVID-19 pandemic by being conservative with his startup funds. He also detailed how he took his startup from $0 in revenue to a $200 million acquisition in just six months.
Here’s a sneak peek of Mehrotra’s startup journey with Dineout.
The impact of the COVID-19 pandemic on Mehrotra’s startup cannot be overstated, and he’s not alone. According to one report, 74 percent of startups saw their revenues decline during the pandemic. During the first wave, Dineout’s revenue dropped to zero and just as the startup was emerging from the rubble, the second wave hit in India.
“When we were coming out of the first wave, things were improving and we were just about to hit our pre-covid numbers when the Delta wave happened and we went back to zero. Everything came to a complete standstill,” Mehrotra says. “In the first wave there was solidarity around the world. Everyone understood that something like this had never happened before so people took it in the right spirit. Our investors understood. We dug her heads down, tried to make the business leaner, tried to stretch our dollars and improve the overall business. But the second wave broke our spirit because we were just about recovered and then went back to zero.”
Build Back Better
Despite the setback, Dineout ultimately came back stronger than ever. When the second wave began to die down in September 2021, Mehrotra and his team set to work digging the startup out of the hole and just six months later they were preparing for acquisition. In May, Dineout announced it was being acquired by Swiggy, an online food ordering and delivery platform, for $200 million.
“All the changes we made to the business during wave one ensured we were able to come out of the second wave much stronger,” Mehrotra says. “In six months we were doing 3x business as compared to our pre-COVID levels. Two years back, it would’ve been impossible to imagine that coming from zero, we would be in a situation to be acquired for $200 million dollars.”
Stretching Startup Funds
Mehrotra attributes the team’s success to their ability to adapt and be more conservative with their spending during the pandemic when revenues declined. Nearly, one-third of startups fail because they run out of funding and personal money.
“The one thing we learned coming out of this is to stretch your dollars as much as you can. We learned to be a lot more efficient with how we spend our money,” Mehrotra says. “In the typical startup journey, when you raise funds, you go around spending money for customer acquisition, marketing, etc. And you don’t actually figure out how far you can stretch your dollars. We learned how to be a lot more frugal. You have to be frugal from day one irrespective of how much money you raise. That’s what’s going to keep you going in the long run.”
In his keynote, Mehrotra covered:
- His founders journey with Dineout
- The impact of COVID and dropping to $0 in revenue overnight
- How his team went back to the basics to fix the business during COVID
- How he strengthened a business for stronger recovery