Zomato raised $1.26 Bn in IPO and now Co-founders are calling it quits.

Zomato raised $1.26 Bn in IPO but Co-founders resigning

Zomato is an Indian multinational restaurant aggregator and a popular food delivery company. A household name in India, you may say. 

IITians Deepinder Goyal and Pankaj Chaddah started Zomato (Initially named Foodiebay) in 2008. The company operates across 24 countries including the UAE, UK, Qatar and many more, according to a report from 2019. 

After 10 years of ups and downs, the startup finally became a unicorn in 2018. However, the year also brought bad news with it.

Co-founder Pankaj Chaddha parted ways in March 2018, sharply one month after Zomato got its unicorn title. And seems like it opened the floodgates for multiple exits of co-founders.

Who resigned from Zomato?

Zomato went public in July 2021, and as of January 2023, it has a market cap of INR 47,000 crore (approx $5.8B). However, since its IPO several high-profile co-founders have started terminating their journey.  

Here’s a timeline of their exits from 2018 – 2023 as explained by ReadOn.

Pankaj Chaddah: The co-founder stayed with the startup for 10 years before venturing out on a different journey. He started on his own and is currently working on Shyft, a Global Health Tech Platform.

Coincidentally Pankaj left a month after Ant Financial, an affiliate company of Alibaba Group invested $210 Mn in Zomato.

Pankaj was a shareholder in Zomato till March 2019.

Gaurav Gupta: He is a Co-founder, and served as the Chief Operating Officer (COO) from 2018 to 2020.  

Gaurav was next in line to leave the startup. He quit in September of 2021, two months after Zomato’s IPO. It was also reported that most business lines started by Gaurav were shut down (International Expansion, Grocery Delivery, Neutraceuticals) 

Same as Pankaj, he also resigned from the company to begin a new journey. However, Zomato’s shares took a major hit soon after he broke the news. 

Gaurav had INR 154.04 Crores (approx $18.7 Mn) worth of shareholdings in Zomato at the time of quitting.  

Rahul Ganjoo: He initially joined Zomato as the Vice President - Head of Product Management in 2017. 

Rahul became Head of New Businesses in August 2022 and spent over 5 years at the startup, before resigning on 14th November 2022. 

He shared a parting message on his Linkedin page;

“As I wrap up my 5+ year stint at Zomato, my heart is full of pride and gratitude - for the work we did and the progress we made, for getting a once-in-a-lifetime privilege to build Zomato and for finding a new family for life. It's been such a fulfilling ride! So much ❤ 🙏 #onwards” 

Rahul had INR 49.27 Crores (approx $5.9 Mn) worth of shareholdings. 

Mohit Gupta: This Co-founder, who was leading the food delivery business at Zomato resigned just 4 days after his colleague Rahul Ganjoo did. 

Before joining Zomato in 2018, Mohit served across Pepsico International and MakeMyTrip. 

Why Mohit Gupta resigned? He resigned from Zomato on 18th November 2022, to seek a new adventure. 

He had INR 154.04 Crores (approx $18.7 Mn) worth of shareholdings.

Gunjan Patidar: 2023 didn’t get off on the right foot for Zomato. Cofounder and Chief Technology Officer (CTO) Gunjan Patidar had been holding Zomato’s hands since 2008. 

He was responsible for all the tech verticals at Zomato. Gunjan nurtured tech talent and improved the design, development, and deployment of new products for customers. 

It most definitely came as a shock when he turned in his resignation on 2nd January 2023. The exit was the 5th major resignation in 4 months for the Food-Delivery Giant. 

Gunjan Patidar had INR 115.79 Crores ($14.06 Mn) worth of shareholdings.  

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Institutional Investors jumped ship as well

The founders of Zomato were not the only ones to jump ship. 

Multiple major investors departed once the Foodtech Giant’s one-year IPO lock-in period ended on July 23, 2022.

(In IPO, Lock-in Period is a set timeframe that starts after a company’s Initial Public Offer. Investors cannot sell or withdraw their shares in the company during that period.)

So who exited Zomato IPO?

Moore Strategic Ventures, Zomato’s Pre-IPO investor was the first one to sell off its entire holdings. The New York, USA-based Venture Capital Firm sold approx $22.8 Mn worth of shares after the lock-in period ended, at a loss. 

Uber Technologies soon followed in Moore’s footsteps and also sold all of its holdings in Zomato. The San Francisco-based ride-hailing giant sold 7.8% of its stake in Zomato, for over $390 Mn.  

Tiger Global sold half of its holdings in Zomato exactly a day after Uber exited. 

The American investment firm had a 5.11% stake in the startup before the IPO lock-in period had expired.    

Sequoia was the fourth major institutional investor to sell off its shares in Zomato.

The popular VC firm first invested in Zomato in 2013. Between September 2021 and August 2022, it sold about 2.01% of its entire holdings on the open market. 

Zomato’s share prices have dropped by 55% since its IPO. 

What does it mean for the investors?

How would these affect Zomato? 

Would more top management jump ship?

All of these questions remain unanswered, for now…  


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