After a series of valuation markdown and a sharp 262 per cent increase in losses yesterday, the online restaurant aggregator and food delivery platform, Zomato has pulled off plug in nine of its 23 overseas markets, including the US and the UK, Italy, Sri Lanka.
As per various reports in media, the company will no longer have physical presence in these countries but will continue to manage the operations out of its headquarters in India.With this, the company will now have feet-on-the street in 14 counties.
Between June 2014 and January 2015, the tech start-up made seven acquisitions of restaurant search companies across the globe. The most significant was its January takeover of Seattle’s Urbanspoon in a USD52 million, all-cash deal. This gave it an entry into the U.S., Canada and Australia – pitting it directly against the popular Yelp. Zomato also bought out six other restaurant search companies, allowing it to enter New Zealand (Menumania), Czech Republic (Lunchtime) Slovakia (Obedovat), Poland (Gastronauci), Italy (Cibando) and Turkey (Mekanist).
However, the losses of the Gurgaon headquartered company increased from Rs. 136 crore in the previous year to Rs. 492.3 crore for the financial year ended March 31, 2016 amounting to a 262 per cent change in the losses before taxation. The company’s operating revenues however have almost doubled, going from Rs. 96.7 crore in the previous year to Rs. 185 crore in the current financial year.
The company will now follow ‘remote management apporach’ in these countries, where it until recently was deploying its own staff to collect and publish content rather than crowd-sourcing it.
“We learnt this (remote management approach) from Urbanspoon. They did not have a
fleet on street,” Co-founder and chief executive officer of Zomato, Deepinder Goyal, was quoted as saying.