Inside Yelp: From 2004 to Now Into a $56 million business
Startup Type:
Headquarter: San Francisco, USA
Current Status: Active (public since 2012)
Founders: Jeremy Stoppelman, Russel Simmons
Founded Year: 2004
Investors: Benchmark Capital, Bessemer Venture Partners, Elevation Partners
Funding Raised: $56 million
What Is the business model of Yelp?
Online platform for crowd-sourced business reviews (restaurants, services) and reservations. Free for users; makes money by selling advertising and enhanced listings to local businesses and through transaction fees (like food delivery or reservations)
How Yelp got started?
Created in 2004 after Stoppelman had trouble finding doctor reviews, Yelp grew by encouraging users to write local business reviews and fostering a community. It became the go-to local guide in the late 2000s, successfully resisting a 2009 acquisition offer from Google
what growth strategy has Yelp followed?
Scaled city by city, leveraging SEO and a passionate reviewer base. Yelp’s early introduction of mobile apps and features like online reservations helped maintain its relevance. Post-IPO in 2012, it broadened services, and while growth slowed in recent years, it remains a staple for local search
what are the top products/features of Yelp
Yelp review platform, Yelp Mobile app, Yelp Reservations, Yelp Ads and business pages
what was the biggest challenge faced by Yelp?
Frequent accusations from businesses that Yelp’s advertising sales tactics were extortive (i.e., paying for ads might influence review order or negative review removal, which Yelp denies) led to reputational challenges and legal battles. Also had to navigate competition from Google and Facebook integrating local reviews and the shift to mobile usage