Zomato shuts down intercity 'Legends' services with immediate effect

Food delivery major Zomato has discontinued its intercity food delivery service “Legends” as it could not find product market fit, chief executive officer Deepinder Goyal said on Thursday.

“Update on Zomato Legends — after two years of trying, not finding product market fit, we have decided to shut down the service with immediate effect,” Goyal said in a post on social media platform X.

Zomato had launched its intercity food delivery service in August 2022 to offer consumers delicacies from across ten cities in India at their homes. However, the service seemingly faced hurdles right from the start.

In November 2022, Siddharth Jhawar, head of the company’s intercity delivery offering at the time, put in his papers. By April 2023, Zomato had silently shut down Legends, before relaunching it in July this year.

To ensure the service succeeded this time around, the company introduced measures such as a minimum order value of Rs 5,000. It also delivered pre-stocked food items, instead of delivering right from restaurants, to only select customers in Delhi NCR, Bengaluru, Mumbai, and other major cities.

Zomato had, last month, also shut down its hyperlocal delivery service “Xtreme” after it did not deliver desired results. Xtreme, which was launched in October last year, allowed merchants to send and receive small parcels.

The discontinuation of Legends comes a day after Zomato announced the acquisition of Paytm Insider.

One 97 Communications (OCL), which owns the brand Paytm, announced on Wednesday that it had entered into definitive agreements for the sale of its entertainment ticketing business that includes movies, sports and events (live performances) ticketing to Zomato, in a deal valued at Rs 2,048 crore.

Zomato reported a consolidated profit of Rs 253 crore in the first quarter of financial year 2024-25 (Q1FY25), up from Rs 175 crore a quarter ago. The company turned profitable for the first time ever in the corresponding period last year (Q1FY24), with a profit of Rs 2 crore.

Zomato’s revenue from operations rose 74 per cent year-on-year (Y-o-Y) to Rs 4,206 crore in Q1FY25, up from Rs 2,416 crore a year ago. It had reported a revenue of Rs 3,562 crore in the previous quarter.

Total expenses for the Gurugram-based food delivery firm increased to Rs 4,203 crore in Q1FY25, up from Rs 3,636 crore a quarter ago and Rs 2,612 crore a year ago.