Zomato Co-founder Gaurav Gupta Quits , Company Exits Grocery Delivery Service

Zomato is shutting its own grocery delivery business for the second time since last year. The online food delivery firm announced on Monday to shut its in-house grocery delivery service from September 17. To recall, Zomato first entered the grocery delivery business during the first phase of the pandemic around April last year. It has also announced to shut its nutraceutical business in less than six months of its launch. While on Tuesday 14th September one of Zomato's Co-founder Gaurav Gupta the man behind the company's blockbuster IPO also announced his exit from the company.  

Read More-: No more discounts on Swiggy, Zomato! What is the future of Online Food Ordering?

• What's The Story?

Post the blockbuster IPO Zomato has attracted the eyeballs of almost all of the investors in the Indian Stock market. Though the company is yet to see the face of profits currently trading at a market cap of more than 1.1 Lakh Crore, much higher than several traditional profitable companies. The company has an international presence and a strong duopoly in the Indian market but the company is in news in the recent few days which should be known to all its investors. 

Zomato co-founder Gaurav Gupta, one of the instrumental figures behind the food delivery giant’s landmark initial public offering (IPO) earlier this year, has resigned on Tuesday. Addressing his team members and colleagues at Zomato on Tuesday, Gupta wrote in an email, “I couldn’t have asked for more – I am so grateful for all the experiences I have had and thankful to all the folks around me for helping me become a much better person."

“We have a great team now to take Zomato forward and it’s time for me to take an alternate path in my journey," Gupta fondly remembered. He was the head of supply at the food delivery startup.

Gaurav Gupta joined Zomato as business head for table reservations in 2015. Later in 2019, he was elevated to co-founder to look at the company’s nutraceutical business. Zomato had earlier named Gaurav Gupta as the head of this division for five years. The food delivery startup shut the business last week.

He was also Zomato’s chief operating officer for almost three years. Gupta was also a part of the team that launched Zomato Pro.

The development of his resignation comes just a day after Zomato decided to stop its grocery delivery service from September 17 mainly on account of gaps in order fulfillment, leading to poor customer experience. The company also said that it believes that its investment in Grofers will generate better outcomes for its shareholders than in-house grocery efforts. Zomato invested $100 million (around ₹ 745 crores) for acquiring a minority stake in grocery delivery platform Grofers.

After pulling the plug on its grocery business, Zomato has rolled back its nutraceutical business in less than six months of its launch. This development comes hours after the company decided to shut down its grocery delivery business from September 17, citing tough competition and moderate success.

• What's Next?

As the company is now focusing to become profitable and concentrate on its core business it will be very interesting to see how things shape up in near future. The humongous market cap which many ace investors, like Rakesh Jhunjhunwala, don't feel justifiable might face some tests if it fails to deliver the huge expectations of its shareholders.