Zomato’s co-founder Deepinder Goyal has resigned from the board of Indian home services unicorn Urban Company, as the food and grocery delivery platform’s own subsidiary Blinkit is said to be planning an entry into the segment.
“Goyal resigned as the new vertical will compete with UC and there would be a direct conflict of interest,” Entrackr reported on Wednesday, citing a source aware of the internal details.
Backed by investors such as Tiger Global Management, Steadview Capital, and Vy Capital, Urban Company helps customers book home services like beauty services, massages, cleaning, plumbing, carpentry, appliance repair, painting, and more, by partnering with thousands of service professionals.
Blinkit’s reported plans to foray into the home services segment come as the quick commerce firm grapples with mounting losses and a drop in revenue. On Wednesday, DealStreetAsia exclusively reported that Blinkit’s loss from operating activities widened by around 150% to Rs 1,422 crore in FY 2022, from Rs 556 crore in the previous year. Meanwhile, the total revenue of the group dipped to Rs 2,625 crore in FY 2022 from Rs 2,731 crore in FY 2021.
Blinkit declined to comment for this story.
The acquisition of Blinkit by Zomato in June last year has been weighing on the latter’s margins, with experts arguing that Zomato’s path to profitability would get postponed due to Blinkit’s cash burn of $165 million a year.
The December quarter was the first full quarter after the consolidation of Blinkit’s quick commerce business. However, excluding Blinkit numbers, Zomato’s adjusted EBITDA turned positive for January, the company said in its financial report.
Meanwhile, Urban Company has also been struggling with surging expenses. For the fiscal year ended March 2022, its expenses rose 90% to over Rs 1,000 crore. Its losses widened over 2X to Rs 514 crore in FY22, according to a report in Entrackr last year.
It last raised $255 million in a Series F funding round led by Prosus Ventures, Dragoneer and Wellington Management in 2021. The round valued Urban Company at $2.1 billion.