Food delivery giant Zomato has officially announced the shutdown of its intercity food delivery service, ‘Legends,’ citing the inability to find product market fit. The service, which was launched in August 2022, aimed to bring culinary delicacies from across ten cities in India to customers’ doorsteps. However, after two years of experimentation and adjustments, the service has been discontinued.
Deepinder Goyal, CEO of Zomato, shared the news on the social media platform X, stating, “Update on Zomato Legends — after two years of trying, not finding product market fit, we have decided to shut down the service with immediate effect.”
The ‘Legends’ service faced multiple challenges from its inception. In November 2022, Siddharth Jhawar, who was heading the intercity delivery service, left the company. The service was silently shut down by April 2023, only to be relaunched in July 2024. To boost its chances of success during the relaunch, Zomato implemented several new strategies, including a minimum order value of Rs 5,000 and delivering pre-stocked food items instead of fresh deliveries from restaurants. The service was limited to select customers in key cities like Delhi NCR, Bengaluru, and Mumbai.
Despite these efforts, the service struggled to gain traction. The discontinuation of ‘Legends’ follows closely on the heels of another service shutdown by Zomato — its hyperlocal delivery service ‘Xtreme.’ Launched in October last year, ‘Xtreme’ allowed merchants to send and receive small parcels but was shut down last month due to unsatisfactory performance.
The closure of ‘Legends’ comes just a day after Zomato announced the acquisition of Paytm Insider, an entertainment ticketing business. One 97 Communications (OCL), the parent company of Paytm, confirmed the sale of its ticketing business, which includes movies, sports, and live events, to Zomato in a deal valued at Rs 2,048 crore.
On the financial front, Zomato has shown remarkable growth. The company reported a consolidated profit of Rs 253 crore in the first quarter of the financial year 2024-25 (Q1FY25), a significant increase from Rs 175 crore in the previous quarter. Zomato turned profitable for the first time ever in the corresponding period last year (Q1FY24), with a modest profit of Rs 2 crore.
Zomato’s revenue from operations also saw a substantial increase, rising 74% year-on-year to Rs 4,206 crore in Q1FY25, up from Rs 2,416 crore in the same period last year. The company had reported a revenue of Rs 3,562 crore in the previous quarter. However, the company’s total expenses also surged to Rs 4,203 crore in Q1FY25, up from Rs 3,636 crore a quarter ago and Rs 2,612 crore a year ago.