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Zomato to not pick up equity stakes in companies for now

The online food delivery platform is looking to conserve cash aggressively.

Zomato’s Founder and CEO Deepinder Goyal revealed that the company was not planning any further equity investments because it has covered most of its objectives in Zomato’s shareholders* letter disclosing results for Q4 2022. Why it matters: It is notable that the announcement coincides with the recent downturn witnessed across global markets including India. The market slump has also resulted in a drop in funding for start-ups. Zomato’s announcement affirms that most companies will be looking to solidify their bottom line instead of making risky bets. Why Zomato invested heavily in 2021: Goyal had said that Zomato was a hyperlocal business and would need to diversify outside of food delivery to tap into economies of scale in the long run. This was the rationale provided by the company behind the investments: Put building blocks in place for a quick-commerce business in India, Accelerate digitisation and growth of the food and restaurant industry. The plan with Blinkit: Goyal did not clarify whether the company intends to acquire or merge with Blinkit but added that there was “a lot to do as the business is at its early stages”. He said that the company has grown well in the past six months, and reduced its operating losses significantly. Zomato will be providing a short-term loan of up to $150 million to fund Blinkit’s short-term capital needs. How Zomato is dealing with the gig worker shortage: Goyal acknowledged that Zomato is facing stress on the availability of delivery partners in select large cities…

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

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