Deepinder Goyal-led Zomato dissolves Rs 2.2 lakh Slovakian subsidiary; Here's why

Billionaire Deepinder Goyal-led food delivery giant Zomato has officially dissolved its subsidiary in Slovakia.

"Further to our intimation dated September 15, 2023, we would like to inform you that Zomato Slovakia s.r.o. (“Zomato Slovakia”), step down subsidiary of Zomato Limited (“the Company”) situated in the Slovak Republic has been dissolved w.e.f. July 12, 2024," the company informed in an exchange filing. 

The development comes ten months after the company initiated the liquidation process in September last year for its operations in Slovakia.

Why did Zomato decide to dissolve its Slovakia subsidiary?

Zomato decided to dissolve the subsidiary because it was non-operational and had a net worth of only Rs 2.2 lakh.

The liquidation was not expected to materially impact Zomato’s turnover or revenue, as the subsidiary contributed less than 0.0001% to the company’s overall net worth.

The decision aligns with Zomato’s strategy to focus on the Indian market and withdraw from smaller, less profitable international markets.

How does this fit into Zomato's overall strategy?

This is not the first time Zomato has dissolved an international subsidiary. In 2016, the company announced plans to shut down operations in nine countries, including the US, the UK, Brazil, Italy, and Slovakia, due to a lack of ground teams in these regions.

The latest move is part of a broader strategy to streamline operations and concentrate resources on its primary market, India.

Within the past year, Zomato has also liquidated subsidiaries in Portugal and New Zealand.

The company reported a 71% year-on-year increase in standalone revenue from operations, reaching Rs 12,114 crore in FY24 and a net profit of Rs 351 crore.