Zomato Media Pvt. Ltd, one of the few Indian Internet start-ups with a global presence, has shut operations in four cities, as food tech companies seek to cut spending in the face of a funding slowdown.
�We are shutting down the ordering business in Lucknow, Kochi, Indore and Coimbatore. The size of the market in these cities is small right now and is growing with time,� co-founder Pankaj Chaddah, who also heads the food-ordering operations, said in a statement. �We will relaunch when the time is right. We will continue to offer the best content.�
As per the reports Zomato's food ordering which they had launched recently is not working well, they are having a tough competition with Foodpanda in this space.
Business in these cities failed to take off despite aggressive marketing and accounted for less than 2% of the total orders placed on Zomato, the company said. Overall, online orders are growing at a pace of 40% every month, it said.
The online restaurant discovery and review platform launched its food-ordering business in April 2015. The company partnered with logistics firm Delhivery (SSN Logistics Pvt. Ltd) and invested in hyperlocal delivery start-up Grab a Grub Services Pvt. Ltd to facilitate food delivery.
Zomato has since May rolled out its food-ordering business in global markets such as the United Arab Emirates (UAE), the Philippines, Australia and South Africa.
Zomato, which started out in 2008, has so far raised about $224 million from Sequoia Capital and Info Edge (India) Ltd, among others.
In an interview with Mint in December, co-founder Deepinder Goyal said the company will invest $40 million in its food-ordering business in the next six months to capture a dominant share of the market in India and the UAE. He said Zomato expects the food-ordering business to break even by March.
�We are aiming for a monthly increase in revenue of $400,000 every month and the growth will be largely driven by online ordering business in India and the UAE,� Goyal said.
