Online food delivery aggregator Zomato is moving to a multiple CEO structure for its businesses that will be housed under a larger organisation called Eternal.
“We are transitioning from a company where I was the CEO to a place where we will have multiple CEOs running each of our businesses , all acting as peers to each other, and working as a super team with each other towards building a single large and seamless organisation,” Deepinder Goyal, CEO and MD of Zomato, wrote on the company’s slack channel last week after shareholders‘ approved its acquisition of Blinkit.
“Starting today, we are going to call this larger organisation Eternal,” he said, adding it will remain an internal name for now.
Zomato currently has four companies – Zomato, Blinkit, Hyperpure, and Feeding India.
Goyal explained that the company was at a stage where it is maturing from running, more or less, a single business to running multiple large companies. He added that Eternal will have multiple companies.
Zomato did not respond to email queries.
Zomato has been actively investing in startups. Just last year, besides investing in Blinkit (formerly Grofers), it also invested in business-to-business (B2B) logistics technology player Shiprocket, hyperlocal discovery platform magicpin and fitness major Curefit.
Goyal, in a company blog in November last year, had said that Zomato was setting aside a war chest of $1 billion to invest in multiple startups over the next two years. A large chunk of it was likely to go into the quick-commerce space, he had then said. Zomato followed this up with the acquisition of Blinkit this year for $569 million.
In the past few weeks, Zomato’s stock has come under massive selling pressure as the one-year lock-in period for internal investors holding around 613 crore shares, or 78% of Zomato’s shares, ended on Saturday (July 23). As part of the large sell-off in Zomato, its pre-IPO investor Moore Strategic Ventures sold its entire holding, marking a loss on its over one year-old bet.
The food aggregator’s share price has corrected nearly 70% from its peak, hit shortly after a blockbuster listing last year. Zomato’s shares on Monday traded at ₹45.3 apiece, down 3.31%, on the BSE.
However, shares of not just Zomato but other tech startups that got listed last year have also taken a beating amid concerns about their valuations. Zomato’s acquisition announcement of Blinkit has also raised worries about its path to profitability.
Last week, global brokerage firm Jefferies said Zomato makes for a great case for long-term investors and set a 12-month target price at ₹100 a piece. Jefferies also said that Zomato management has accelerated its journey towards better unit economics and is now eyeing a break-even in the food delivery business in the foreseeable future.
Zomato reported a net loss of ₹359.7 crore for the quarter ended March versus a loss of ₹138.1 crore during the same period in the preceding year. The net loss widened despite a rise in other income to ₹138.2 cr versus ₹58.4 crore.
Zomato’s revenue, however, saw a 75% rise in Q4FY22 to ₹1,211.8 crore from ₹692.4 crore year-on-year. The company will report its fiscsal first quarter (April-June) earnings on 1 August.
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