Barely two months after a blockbuster initial public offering, online food delivery startup Zomato is facing a high-profile exit.
Co-founder Gaurav Gupta has decided to leave the company to “start a new chapter.” In an emotional internal mail, Gupta wrote, “I am taking a new turn in my life and will be starting a new chapter, taking a lot from this defining chapter of my life – the last 6 years at Zomato. We have a great team now to take Zomato forward and it’s time for me to take an alternate path in my journey. I am very emotional as I write this and don’t think any words can do justice to how I am feeling right now.”
Zomato founder Deepinder Goyal thanked Gupta for his contribution. “We have seen Zomato through great as well as terrible times together, and brought it here today. There’s so much of our journey still ahead of us, and I am thankful that you are hanging your boots at a point where we have a great team and leadership to carry us forward,” he said.
Gupta joined Zomato in 2015 and was elevated as chief operating officer in 2018 and given the co-founder title in 2019. Prior to that, he had served A.T. Kearney Limited for over 10 years.
Interestingly, this resignation comes while the company is shutting down its underperforming businesses, some of which were headed by Gupta. Zomato had on Monday announced that it was winding up its grocery delivery service from September 17. The company believes its $100 million investment in the online grocery platform Grofers will generate a better outcome than an in-house venture.
Last month, it announced the closure of its Singapore and UK-based subsidiaries, and earlier it had shut down the US subsidiary Nextable Inc. Zomato has also closed its nutraceutical (food products with medical or health benefits) business barely a year after its launch.
Gupta played an active role during the run-up to the initial public offering in July and Zomato netted $1.3 billion. According to stock exchange data, the offer was oversubscribed 38 times, driven by strong institutional investor interest. It received bids for 27.5 billion shares against 719 million shares on offer.
However, for the quarter ended June 30, Zomato’s losses tripled to 3.56 billion rupees, as against 998 million rupees in the year-earlier period. The total income of the company soared to 9.16 billion rupees from 2.83 billion rupees a year ago.
Last year, Zomato took over Uber Eats in an all-stock deal, estimated to be around $300-350 million, after the ride-hailing giant Uber Technologies Inc decided to exit the food delivery business in India.
Incorporated in 2008, Zomato is based out of Gurgaon, near New Delhi, and has a presence in 525 cities in India with 389,932 active restaurant listings. It also has a presence in 23 other countries.