Food delivery tech company Zomato has stopped its service in 225 small cities of the country. The company has done this to reduce its losses. The city contributed only 0.3% to the company's gross order value in the December quarter. The company incurred a loss of Rs 346.6 crore in the quarter ending December. On Friday, the company has released its third quarter (Q3FY23) results.
On discontinuing service in 225 cities, the company said, "The performance of these cities has not been good in the last few quarters." However, the company has not named the affected cities. At the same time, the company also talked about the measures being taken to increase its profits. Zomato informed that it has launched Gold subscription to increase the order frequency. It is claimed that 9 lakh people have joined this program.
Zomato is one of the most used food delivery app in India. Last year in 2021-22, the company's food ordering and delivery business was running in more than 1,000 cities of the country. On the other hand, talking about the result, the company's loss has increased 5 times to Rs 343 crore in the third quarter of FY 2023. However, the revenue grew by 75% to Rs 1,948 crore from Rs 1,112 crore on an annual basis.
This company was started in 2008 from Gurugram, Haryana. Then its name was not Zomato but Foodiebay, which was inspired by ebay. It was founded by Deepinder Goel and Pankaj Chadha. In 2008, Zomato was not a food delivery service, but a restaurant discovery service, that is, its job was to provide information about different restaurants in the city.
This service was very successful and in less than 2 years, Foodiebay has added 2 million customers and 8,000 restaurants. In late 2010, the founder of the company re-launched it under the name Zomato. Along with this, the company also started food delivery service.