Zomato Pulls Out Of Several International Markets

Zomato, the restaurant discovery and online food delivery platform, has pulled physical presence out of nine markets. Although still operational remotely from India, Zomato will not have personnel associated with the company in several markets. The move reduces the “burn rate” from $9 million to $2 million, according to the company. 

Pulling Out Of Several Markets

Zomato will no longer have local presence in countries including United States and Canada, the markets which the company entered through the acquisition of UrbanSpoon last year. The company will still be present in this market but the operations will be handled by team situated in India. Speaking about the company’s pull out in these markets, Deepinder Goyal, CEO of Zomato, said, “Markets where a physical presence has been pulled out are high burn and high risk area. However putting the teams back in these markets is not off the table.” 

Turbulent Year

It has been a turbulent year for Zomato with HSBC releasing a report cutting the valuation of the company in half. One of the few unicorn startups in the country saw its valuation drop down to $500 million, according to the report. The company has also incurred mounting losses in this past financial year of nearly Rs. 492 crore, up by 262 percent. The company expanded aggressively last year targeting several international markets but as seen its presence diminish in these same markets. Zomato’s revenue share in India has also fallen to 50% in recent months. Speaking to ET about Zomato’s aggressive expansion, Harminder Sahni, founder of retail consultancy, Wazir Advisors, said, “If India is only 50% of their market on revenue base of Rs 185 crore revenue, then it seems like a small market to address. Also, very few companies have been able to do acquisitions well. I think, Zomato acquired very aggressively and there will be more write offs going ahead.