Zomato co-founder Mohit Gupta resigns, marking the third big exit in two weeks

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Zomato co-founder Mohit Gupta has quit the company after a four-and-half-year stint, marking the third high-profile exit from the food delivery major in recent weeks.

Zomato's new initiatives head and former food delivery chief Rahul Ganjoo had resigned earlier this week while Siddharth Jhawar, the head of its Intercity Legends service, announced that he had left the company a week back.

Gupta joined Zomato in 2018 as the head of food delivery. He was subsequently elevated to co-founder in 2021 to oversee new businesses when Ganjoo was made the CEO of food delivery.

Before joining Zomato, Gupta was the chief operating officer of travel portal Makemytrip.

Amid a meltdown of tech stocks, the food delivery company has suffered in the public market this year as its stock price has fallen by more than 50 percent from its peak of Rs 162 on the BSE.

Moreover, the growth of its food delivery business has slowed as it has become bigger – quarterly sales have grown only 22 percent from Rs 5,410 crore in Q2 of FY21 to Rs 6,631 crore in Q2 of FY22.

In contrast to this, quarterly sales grew 158 percent from Q2 of FY21 to Q2 of FY22.

However, there might also be a bright spot. Marketing cost has come down 23 percent year-on-year to Rs 300 crore in Q2 and delivery expenses have dropped 28 percent to Rs 283 crore.

Given that the company’s revenue has grown 62 percent over this period, it would seem that the operating leverage and scale effects that investors have been longing to see are finally kicking in.

Zomato’s net loss for the quarter narrowed to Rs 250.8 crore against Rs 434.9 crore registered in the same quarter last year. Meanwhile, revenue from operations zoomed 62.20 percent to Rs 1,661.3 crore.

In August, Zomato had said that its food delivery business had broken even at an operating level as it reported that Adjusted EBITDA for the segment was zero in the June quarter (Q1). But, it has now revised that metric to an Adjusted EBITDA loss of Rs 113 crore for Q1.

Zomato has again claimed to break even in food delivery in the September quarter as it recorded an Adjusted Ebitda of Rs 2 crore for the segment.

Adjusted Ebitda is a metric that many tech companies use even as each one of them defines it differently. Typically, costs that are not considered operational for the business such as employee stock option expenses are kept out of it.