Online restaurant aggregator Zomato announced said it would shut down its operations in Lebanon, its only international market following its exit from UAE last year.
Online restaurant aggregator announced on Wednesday that it would divest its recently-acquired company Fitso for $50 million to Curefit Healthcare. Additionally, the aggregator stated that it would be shutting down its operations in Lebanon, its sole international business following its exit from UAE, last year.
The aggregator also announced plans to invest a net $50 million cash plus the value of the Fitso business for a cumulative shareholding worth $100 million in Curefit. This amount to a total shareholding of 6.4 per cent. "This will help us potentially explore cross-selling benefits between Zomato and Curefit, as we see food and health becoming the same side of the coin in the long term," the company stated in its blog post.
Moreover, the aggregator stated that to ensure smooth sailing for its core business, which is food delivery and dining, they decided to divest and shut down some of the other non-core experiments and businesses. As per the aggregator, the business being shut down or divested have contributed less than 1 per cent to its adjusted revenue and 13 per cent to adjusted EBITDA loss in the second quarter, this year.
The aggregator said that it would also shut down its direct-to-consumer experiment in Nutraceuticals. However, it announced plans to invest $50 million or more in its restaurant supplies providing service, Hyperpure, in the next 18-24 months.
In addition to the above, the company informed that it has signed definitive agreements to invest about $75 million in Bigfoot Retail Solutions Pvt Ltd (Shiprocket) for an 8 per cent stake. This is as part of a larger $185 million round. Further, it announced plans to invest about $50 million in MagicPin for 16 per cent as part of a total funding round of $60 million.
The company stated that food ordering and delivery is still their mainstay where they expect to create sizeable shareholder value going forward. "We believe that the food delivery market in India is still nascent, and there is an opportunity to grow the market at least 10x over the next few years. In order to make this happen, we are going to continue investing heavily in market creation, in addition to investing in ecosystem companies around our food delivery business so that the cost of running a better food delivery business goes down with time," the company's blog read.
It added that while the dining segment is still recovering from the shockwaves of COVID-19, it would take a few months for it to be back at pre-COVID levels. "We continue investing in product development and working with our restaurant partners to get the industry back in shape easier and faster," it informed.
According to Zomato, its Gross Order Value in the country in the second quarter more than doubled on a year-over-year basis to $721 million "This growth was driven by an increase in the number of transacting users, the number of active food delivery restaurants and active delivery partners on our platform," the company informed.