In a recent turn of events, Zomato’s co-founder Gaurav Gupta has stepped down after his six-year successful stint. Gaurav Gupta had headed the food delivery firm’s supply vertical. It was in his internal mail to his employees where he informed his employees about his decision to quit.
Now given the major development, not necessarily positive, the stock market had to react in its usual way. Given the success of Zomato’s IPO and its growth story, the stocks that had hit fresh highs of ₹152.75, fell by a significant 10%. According to the report, the shares had fallen to ₹136.20. thus, the share prices closed the day at ₹144.10 apiece.
Talking about Gupta’s 6 years stint at Zomato, he had joined the company Gupta, who had joined the food-tech startup in 2015. He was effectively elevated to the position of chief operating officer in the financial year 2018. Subsequently, he was named as a co-founder in the year 2019. This marks the impressive rise of Gaurav Gupta at the food startup Zomato.
It is to be noted that his decision to step down came days after Zomato decided to shut down its grocery delivery chain coupled with the closure of nutraceutical businesses. This came after running pilots for several months.
According to Gaurav Gupta, he has taken a new turn in his life and will be starting a new chapter. Praising the Zomato team he added that his experience was amicable with the great team but time for his departure for a newer experience had arrived.
Mr. Gaurav Gupta stated that “I could not 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,”
The impressive rise
Talking about Gupta’s impressive history of making it to the CEO position, Gupta had effectively joined the company from consulting firm A.T. Kearney. He was the one who had promulgated the idea of Zomato’s table reservation business. This initiative was launched across key regions like the UAE, India, and Australia. In addition to his impressive scheme and initiative, he can also be credited with the achievement of growing the ad revenue business of the company across India.
It is to be noted that the Ad revenue for the company was increased not only in India but also in West Asia and Europe. This all was achieved under his tenure as the global advertising sales head. According to the reports, from last November, he was significantly appointed as in charge of the nutrition business.
It can be rightly stated that the terms of business with the employees and partners were quite amicable as Zomato founder and chief executive Deepinder Goyal too in his to Gupta’s had stated his thanks for the years of contribution and achieving great heights in the last years in the company. He hailed Gupta’s leadership and management skills which had helped the comp0amy whether various storms together.
The failure of the recent initiatives
It is to be noted that Gupta’s departure comes just two months after Zomato’s hot IPO that had helped the company effectively raise $1.3 billion. Even being a loss-making company, Zomato’s shinning growth prospects had harbored much appreciation and hit IPO with shares selling at overprized value. It is to be noted that Zomato due to its high-profile IPO had ushered the way for many other startups in India who subsequently filed for IPOs witnessing the great success of Zomato.
This had led to the burgeoning IPO season in India. It is to be noted that Zomato wanted to venture out into the grocery delivery sector in India. With its grocery delivery initiative, it was trying to capture the market with speedy deliveries. But according to reports, due to higher competition from the peers and late deliveries due to the time crunch, Zomato had to pull off the campaign.
Zomato- the star of the IPO market for 2021
But it is to be noted, that even though the newer initiative Zomato might not have worked, it still had recorded impressive revenue in the June quarter. According to reports, maiden quarter results that were released last month, Zomato had recorded the revenue growth to ₹844 crores. This was recorded in the June quarter. It is a huge leap, given the fact that it had grown from the revenue amounting to ₹266 crores in the year-ago period. Additionally, according to various reports, losses had risen to more than ₹356 crores from ₹99.8 crores in the period under our consideration.
Thus, with the departure of the strategic personality from the Zomato and growing competition from its arch-rival Swiggy, how will Zomato whether its future storms is something we’ll have to wait and scrutinize.