Exclusive: Zomato Halts Operations Of Restaurant Funding Platform ‘Zomato Wings’

Exclusive: Zomato Halts Operations Of Restaurant Funding Platform ‘Zomato Wings’


In November 2021, Zomato launched Zomato Wings to facilitate equity funding for restaurants/cloud kitchens by introducing them to investors

Zomato failed to scale up Zomato Wings due to multiple reasons, including the funding winter, sources said. There is a possibility that Wings might be restarted later this year

The foodtech giant partnered with revenue based financing platforms in early 2021 to facilitate funding for restaurants, but shut down the pilot in 3 months

Foodtech giant Zomato has halted the operations of  ‘Zomato Wings’ platform, which it launched late last year to help restaurants connect with investors to raise funding, sources told Inc42. 

“Since April, things have been put on hold here (Zomato Wings). The funding winter has shooed away the investor community,” a person aware of the matter said. 

There is a possibility that Zomato Wings might be restarted at the end of the year. However, all activities have been halted at the moment, another person aware of the matter added.

Zomato Wings was launched in November last year as an intermediary platform to facilitate equity financing for restaurants/ brands/ cloud kitchens. The platform brought together these businesses and investors on a single platform.

“As we partner with more investors by connecting them with enterprising restaurants, more budding restaurants would use this platform for fundraising, and the platform’s flywheel would create a win-win for restaurants and investors, and by extension, for Zomato!” Zomato said in a blog post then. 

However, as Zomato’s share price plummeted during the first six months of 2022, the startup decided to focus on its core business.

The global economic slowdown amid geopolitical tensions has not only hit the global equities market but also affected startup funding. As investors became cautious, the year 2022 has so far seen a sharp fall in funding, startups resorting to layoffs, and cut in valuations in the Indian startup ecosystem.

“The main purpose of Wings was to be a platform that facilitates equity financing for restaurants. Zomato was only acting as an intermediary platform between investors and restaurants therefore there’s no correlation between Wings and our P&L,” a company spokesperson told Inc42. 

However, the company didn’t reply to questions about the number of restaurants or brands for which Zomato Wings facilitated funding in the first nine months and if the platform is still operational.

Failure To Take Off

Another source told Inc42, “Our understanding is that they wanted to do equity. They then tried debt and wanted to do it in-house. But they could not scale it in-house.” 

The ideal solution requires a complex operational setup for the breadth of requirements across restaurant partners which cannot be built in-house. Zomato should ideally partner with a financing specialist as Wings will always be non-core to its business model, the source added.

Inc42 has also learnt that the Deepinder Goyal-led unicorn had started a pilot project early last year by partnering with several revenue-based financing platforms (RBFs) to help restaurants with financing. However, the pilot project was scrapped within three months.

“RBF was a very small pilot to test the appetite for alternative instruments, but the market seemed small so we didn’t scale it up,” the Zomato spokesperson added. 

Zomato Revenue-based Funding


Zomato failed to identify the right kind of restaurants who would have been a good fit for RBFs for the pilot. There was no filtering of restaurants based on minimum criteria and there was lack of marketing for the project, one of the sources said.

RBFs, such as GetVantage, Klub, Velocity, offer financing startups and businesses across sectors to help them grow their business.

“RBF is a new concept. How can you sell a new funding alternative without appropriate marketing?,” another source said. 

Focus On Profitability

In June, Zomato announced the acquisition of loss-making quick-commerce startup Blinkit for $558 Mn to take on its archrival Swiggy’s Instamart and Mumbai-based Zepto. It’s to be noted that the valuation was a 44% cut compared to the $1 bn when Zomato invested in it last year.

Zomato has also cut its overall investment guidance for Blinkit to $320 Mn from $400 Mn earlier. It has already invested $150 Mn in the quick-commerce startup so far.

Last week, it reported a narrowing of its consolidated loss to INR 186 Cr in the June quarter of the financial year 2022-23 (FY23) from INR 360 Cr in the corresponding quarter last year. The startup’s operating revenue jumped 67% on a year-on-year basis to INR 1,413.9 Cr.

While Zomato’s food delivery business achieved breakeven at adjusted EBITDA level in the June quarter, it is now aiming to achieve breakeven at adjusted EBITDA for overall business between the fourth quarter of FY23 and second quarter of FY24.

“…internally, we are aiming to get there by Quarter 4 of this fiscal year. That is the internal goal that we have as a team but we think that if we slip on that, it should not be later than Q2 FY24, which is September 2023 quarter for getting to breakeven on adjusted EBITDA at the Zomato level,” the startup’s CFO Akshant Goyal said during a post-earnings call.

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