The rise and rise of Gaurav Gupta, Zomato’s co-founder and former COO and then his sudden exit is also something worth exploring.
Gaurav Gupta, Zomato’s co-founder and former Chief Operating Officer (COO), left the food tech platform after dedicating six years to the company. He gave his best wishes to his former company in a blog post titled ‘Always in love with Zomato’. But if it really was true love, why then did he leave?
While Gupta, in an email sent to employees, said that he is stepping down as he starts “a new chapter” in his life, Zomato has said that Gupta’s exit ‘does not warrant any disclosure’ – Now that’s an interesting choice of words, so interesting that it warrants deeper analysis.
The reason Zomato said that Gaurav Gupta’s exit does not warrant disclosure is because apparently, he was not designated as a key managerial personnel under the Companies Act, 2013. He was not a promoter of the company, nor did he have any equity in the company. But according to Wikipedia, he’s listed under the ‘Key People’ section, right below CEO Deepinder Goyal. In fact, only Gaurav Gupta and Deepinder Goyal are in that section. (Though we won’t see Gupta anymore once Wikipedia is updated).
It is even more puzzling that Gupta resigned two months after the company went public. He had been the face of the company at the time of the IPO, when Deepinder Goyal had taken a back seat when it came to media interactions. So for investors Gupta truly was the face of the company during that time. Though the stock price has been indifferent to Gupta’s exit and the show will likely go on, Gupta’s exit may be the result of a fall out between Goyal and him, reported Moneycontrol, quoting sources.
Hence, Twitterites also didn’t fail to speculate when Goyal tweeted, literally thanking him for the exit, “I am thankful that you are hanging your boots at a point where we have a great team and leadership to carry us forward.”
The rise and rise of Gupta and then his sudden exit is also something worth exploring.
Gupta joined Zomato in 2015 as Business Head, was soon promoted to Head of Global Advertising Sales, and finally became Chief Operating Officer in 2018, the first member of the team to be promoted to COO under the ‘Zomato Founder Program’. He was further elevated to the rank of Co-founder in March 2019, and then resigned two and a half years later.
It’s prestigious and rare when a company executive rises to the position of ‘Co-founder’, a worthy reward for experience and competence. And Gupta certainly earned it. He was instrumental in launching the subscription service Zomato Gold and helping it become one of the fastest-growing paid membership programs. So the question that comes to mind again is: why leave?
One reason could be that Gupta was uncomfortable with the long hours and low pay of delivery riders, or delivery ‘partners’ as Zomato likes to call them. Perhaps this troubled Gupta on a moral level. Or maybe he didn’t care, and he was only uncomfortable when the public learned how Zomato treats its ‘partners’. Delivery riders have started venting about poor working conditions on Twitter.
For a public company, any reshuffle in the senior management will trigger a reaction and Zomato may not be an exception. On September 14, when the news of Gupta’s departure broke, the company’s share price fell almost 2%. As clinical psychologist Steven Goldbart noted in his article, “While one high-profile exit is manageable, if several follow, it could be cause for alarm.” When executives and employees quit en-masse after their firm comes into money, “the company usually goes belly up,” he warned.
Goyal, though, claims there is no cause for concern. “There is so much of our journey still ahead of us,” he wrote in an email.
Meanwhile, Gupta left soon after Zomato shut down both its nutraceuticals and grocery delivery business – Could that be a coincidence? Earlier this year Zomato had big plans about delivering groceries and other health supplements but simply could not compete with other players that were promising express delivery in 15 minutes. Luckily, Zomato has acquired a 9.16% stake in Grofers and has invested about $100 million in the online e-grocery firm. Zomato believes their minority stake in Grofers will ultimately generate a better outcome for their shareholders rather than any in-house grocery effort.
We may continue to speculate on Gupta’s exit, and there may be more reasons than one. In his exit post he also said, ‘I am in love with Zomato and will always be.’ It might not make sense to leave something you truly love, but then again absence does make the heart grow fonder. So if Gaurav Gupta does return to Zomato, no matter how slim the chances are, his relationship with Zomato might be stronger than ever. But odds are he’ll find a new love in the next chapter of his life. We’ll just have to wait and see.