Zomato, the prominent foodtech company, has announced its intention to dissolve its subsidiary, Lunchtime, which operates in the Czech Republic, as stated in an official filing with the stock exchange.
“Pursuant to Regulation 30 of the Listing Regulations, we wish to submit that Lunchtime.cz s.r.o. (“Lunchtime”), step down subsidiary of Zomato Limited (“the Company”) situated in Czech Republic has initiated the process of liquidation on September 01, 2023,” said Zomato.
As per the foodtech leader, Lunchtime had no ongoing business activities. This subsidiary holds a valuation of INR 28.2 Lakhs and has not generated any revenue or made any contribution to Zomato’s overall net worth.
Zomato has been strategically closing underperforming subsidiaries globally to concentrate its efforts on the Indian market.
This year, Zomato has been actively streamlining its global operations by closing down subsidiaries in several countries, including Indonesia, Portugal, and Jordan. Additionally, the company has announced its forthcoming exit from the Philippines. It’s important to note that many of these subsidiaries were not engaged in active business operations.
At present, Zomato is solely engaged in active operations within India and the UAE. However, in November 2022, the Kuwait-based foodtech startup Talabat made the decision to discontinue Zomato’s food delivery unit in the UAE, which it had acquired for a reported $172 million back in 2019.
The Indian foodtech company continues to provide restaurant discovery and dining-out services in the UAE.
At the beginning of the year, Zomato announced its withdrawal from 225 cities across the country due to underperformance. In a shareholder letter, Zomato’s CFO, Akshant Goyal, stated that the foodtech company had ceased operations in approximately 225 smaller cities in January. These cities had contributed only 0.3% of Zomato’s Gross Order Value (GOV) during the third quarter of the fiscal year 2023 (October-December).
The leading foodtech company also implemented a platform fee ranging from INR 1 to INR 3 per order as part of its strategy to improve monetization and maintain operations in smaller cities. Zomato’s focus on monetization and cost reduction resulted in the company achieving a profit of INR 2 crore during the June quarter of FY24, marking this significant achievement for the first time.
Last week, both Tiger Global and SoftBank sold off their shares in the foodtech giant. Tiger Global made a complete exit from the startup, and this development led to a notable surge in Zomato’s share price.
Zomato’s stock performance has been strong in recent months, reaching a 52-week high of INR 102.85 per share just last month. As of 1:15 PM on Monday, September 4, the foodtech company’s shares were trading at INR 98.05 on the BSE, a modest increase from Friday’s closing price.