Gaurav Gupta, one of Zomato's five co-founders, stepped down from the company and is serving his last day at the listed foodtech firm today. The news came as a surprise to many even as media reports began breaking about it. The company subsequently announced the news on Twitter, while no official filing has been made with the regulators yet.
Confirming the development on Twitter, Zomato founder and CEO Deepinder Goyal wrote, “Thank you @grvgpta – the last 6 years have been amazing and we have come very far. There's so much of our journey still ahead of us, and I am thankful that we have a great team and leadership to carry us forward."
Soon after, Zomato share prices dropped 5 per cent to hit an intraday low of Rs 136.20 on BSE. It later recovered to close the day 0.63 per cent higher at Rs 144.10.
“A co-founder leaving a company in just over a month of public market debut doesn’t give a good feeling to investors. Also, announcing a co-founder exit on Twitter before officially informing the regulators is not a good sign," a venture capital investor told Business Today.
An IIT and IIM graduate, Gupta said he will be starting a new chapter after his six-year stint with the footech firm.
"I am taking a new turn in my life and will be starting a new chapter, taking a lot from this defining chapter of my life – the last 6 years at Zomato. We have a great team now to take Zomato forward and it’s time for me to take an alternate path in my journey," Gupta wrote in an email to Zomato employees.
Gupta joined Zomato in July 2015 after spending about a decade with A.T. Karney as a consultant. He joined Zomato as business head, table reservations, and was promoted as head of global advertising sales and president of large enterprise accounts in 2017. He was made the Chief Operating Officer (COO) in 2018, when the company carried out a major shake-up of its top management ranks.
During his time with the company, Gupta handled a slew of critical projects, including cloud kitchen business, Zomato Infrastructure Services, sourcing, content and reviews. He played key roles behind some of Zomato’s key business initiatives such as its subscription product Zomato Gold, business-to-business (B2B) vertical Hyperpure and payments business Zomato Pay. He launched and scaled the company’s table reservation product in many international markets.
Subsequently, he was elevated to the position of co-founder in March 2019 while continuing to retain the title of COO. He was the first to be elevated to the co-founder rank. Making the announcement in an internal email at that time, Goyal wrote, “This is not a ‘reward’- this is empowerment, for the right person, to seamlessly be able to level-up to a role which he has shown the potential for.”
However, the journey was not entirely fun for Gupta. In November 2020, he relinquished the role of COO to lead the company’s newly formed nutrition business.
"I will be vacating the COO position at Zomato. I was anyway not doing this role and it will be great for all of us if we find someone better than me to do this role," he said in an internal email at the time. He said the nutraceuticals business can be "a large value driver for Zomato in the future". The vertical didn’t last for a year.
His departure from the company comes just a day after the Gurugram-based firm shut down its grocery delivery service, in the operations of which Gupta was actively involved. The decision was mainly attributed to gaps in order fulfillment, leading to poor customer experience. The company has been running a pilot grocery delivery service in select markets from July this year.
"At Zomato, we believe in delivering best in class services to our customers and largest growth opportunities to our merchant partners. We don't believe that the current model is the best way to deliver these to our customers and merchant partners. Hence, we intend to stop our pilot grocery delivery service effective 17 September, 2021," the company said in an email to its grocery partners on Monday.
The overseas business which Gupta was heading did not pick up the pace the company was hoping for. Early this month, the company informed the regulators that it is shutting down its subsidiaries in Singapore and United Kingdom as it turns focus fully on the Indian market. It had previously shut its US subsidiary and sold-off US-based restaurant booking platform NexTable.
"After being in a job like this for so long, people get tired, people will prioritise personal things. Gaurav’s move hasn’t really caused a huge impact on the share prices. If Deepinder is leaving, it becomes a huge thing, but Zomato is now a professionally managed and governed company, so these things don’t really mater, not one investor has sounded an alarm over it," an investor in Zomato told Business Today.
Though Gupta was the pointsperson during Zomato’s IPO listing porcess, a source close to the development said it was Chief Financial Officer (CFO) Akshant Goyal who led the entire IPO fundraise.
As per Zomato’s draft red herring prospectus (DRHP), Gupta held stock options worth Rs 179 crore.
Zomato was launched by Goyal and Pankaj Chaddah in 2008 as a restaurant discovery portal. It was called Foodiebay.com then. Chaddah left the firm in 2018 to launch a mental health and wellness venture named Mindhouse.
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