Foodtech Giants Hit Reset On Diversification, D2C Brands In Catch-22 & More

Swiggy, Zomato Put Diversification Plans In Slow Lane  

India’s foodtech titans, Swiggy and Zomato (now Eternal), are making a strategic U-turn. After years of aggressive expansion across food delivery, quick commerce, events, and lifestyle services, both companies are pulling back from non-core bets to focus on core operations to drive profitability.

Dialling Down Diversification: The past few months have seen Zomato pull the plug on its 15-minute food delivery service, Quick, and home-made meal service, Zomato Everyday. Swiggy, too, has made similar retreats by suspending pick-and-drop service, Genie, and offloading the rights of its multiple digital-first food brands to Kouzina. Analysts say the two are shedding “visceral fat” — verticals that fragmented focus and strained operational efficiency. 

Why The Course Correction? The foodtech giants seem to have realised that profitability hinges on diversifying smartly rather than untamed expansion. Experts say, non-core verticals were slowing Zomato and Swiggy down, impacting their operational efficiencies, creating quality control and customer experience hiccups and were eating into the revenues of their core businesses.

Strain On Bottom Lines: Despite clocking a healthy INR 5,833 Cr in revenues in Q4 FY25, up 64% YoY, Zomato’s profits declined 77.8% YoY to INR 39 Cr. Similarly, Swiggy clocked INR 4,410 Cr in revenue in Q4, up 45% YoY, but saw its net loss nearly double to INR 1,081 Cr.  

What’s On The Horizon? The way forward could see both Zomato and Swiggy head towards a more focussed set of revenue streams, driven by value rather than FOMO. Most industry observers see the two giants rationalise what doesn’t work to shield their core bread and butter businesses.

However, with the war for ultra-fast deliveries intensifying, does it make sense for Swiggy & Zomato to slow in the race to be everything everywhere all at once? Let’s find out… 

From The Editor’s Desk

D2C Brands In Catch-22: The multilayered ecommerce platform fees and advertising spends have become a major concern for D2C brands. With seller fees now hovering around 40% to 50%, here is how these charges are squeezing small businesses and emerging D2C brands.

Mixed Week For New Age Tech Stocks: Nineteen out of the 33 new-age tech stocks under Inc42 coverage gained in the range of 0.69% to over 26% last week. Honasa gained the most, up 26.2%, while EaseMyTrip emerged as the biggest loser, falling 7.22%.  

Startup Funding Rebounds: Indian startups cumulatively raised $231.7 Mn across 16 deals last week, witnessing a 53% jump from the $151.6 Mn raised in the preceding week. Euler Motors and Oxyzo topped the charts, raising $75 Mn and $62.4 Mn, respectively.

Play Store Delists BYJU’S App: The edtech startup’s Android app is no longer available on Google Play Store, with users experiencing issues while accessing paid subscriptions and video content. The app was reportedly delisted due to “disruptions in payments for its services”.

Eternal Staring At INR 3,235 Cr Outflow: Global index provider FTSE Russell has reduced the investability weighting of the foodtech major on its indices to 49.5% from 82.7% earlier, which may lead to major outflows. This comes after Eternal capped its foreign ownership to 49.5%.

SC Stays GST Notice Against Paytm: The fintech major said that the Supreme Court has stayed the show cause notice, totalling INR 5,712 Cr, against its RMG vertical, First Games. In its notice, DGGI opined that real money games attracted 28% GST, not 18%. 

India’s Ozempic Era: As GLP-1 medications make their way into India, Bengaluru-based Healthify has turned to Mounjaro for its all-new weight loss programme, backed by nutrition, physical training, and lifestyle changes. Can Healthify lead India’s weight loss shift?

Tracking Layoffs At Indian Startups: Caught in the crossfire of AI automation and mounting losses, 3,600+ employees have been laid off by Indian startups so far this year, causing financial and mental distress to the aggrieved employees.

Inc42 Startup Spotlight

How LehLah Is Helping Influencers Supercharge Content Monetisation 

India has seen a sharp rise in influencers, with the number crossing 4 Mn by the end of 2024. However, fewer than 10% of content creators are able to monetise their content successfully. Realising the struggle to convert influence into income, Ashna Ruia founded LehLah in 2022.

Help Influencers Monetise Smarter: The Mumbai-based startup combines the power of affiliate marketing with social media. It allows influencers to share product recommendations and earn a portion of income from these sales. The startup works on a performance-based model and shares a portion of its sales commissions with influencers. 

Making A Splash In India’s Creator Economy: As of March 2025, LehLah claims to have crossed INR 100 Cr in gross merchandise volume run rate. The platform boasts over 50,000 active influencers. 

At the heart of all this is the startup’s ambition of grabbing a big slice of India’s burgeoning creator economy. Can it become the go-to platform for influencers looking to scale their monetisation play?