Zomato shuts down intercity food delivery service ‘Legends’

Food ordering platform Zomato has shut down ‘Legends’—its intercity delivery service—after two years of trying and not finding product market fit, founder and CEO Deepinder Goyal announced.

Zomato’s long-distance or inter-city food delivery service allowed customers to order "legendary dishes" from famous cities. Such food items used to be delivered to customers through air courier services the "very next day".

“We have decided to shut down the service with immediate effect,” Goyal said in a post on X.

This comes a day after Zomato acquired Paytm’s movie and events ticketing businesses for ₹2,048 crore. The transaction also includes a transition services agreement where the ticketing business will continue to run on the Paytm app for a period of up to 12 months to ensure a smooth transition of the business from Paytm to Zomato. As part of the transaction, around 280 employees will move to Zomato.

“This is not really an absolutely new business for us as we have already been doing ticketing as a business for more than a year now and have been eyeing building more use-cases for that business. Just to recap, our going-out business (which includes dining-out and event ticketing) did ₹3,225 crore of GOV in FY24 growing at 136% YoY. It never gets spoken about much given all the attention food delivery and quick commerce get but this is already a profitable and large business for us,” Goyal said in a letter to shareholders.

“We believe, over the next decade and beyond, going-out experiences will continue to grow strongly in lockstep with overall growth in lifestyle and consumption. The proposed acquisition helps us add more scale and offer newer use-cases (like movie and sports ticketing) to our customers in this segment,” he said.

The Zomato founder says this acquisition makes the company more relevant for customers which also gives an opportunity to spin-off the business into a new app which could be a game changer for each of these use cases given the need for a single brand as a destination in this segment.

Zomato plans to launch a new ‘going-out’ app District in the next few weeks.

“If you see the market landscape today, going-out (for entertainment) is not really an organised category in India. Customers have to go to different apps for booking movie tickets, IPL tickets, dining-out table reservations, discovering live entertainment, booking weekend getaways, etc. Having all these use cases addressed through ‘District’ - our dedicated going-out app - has the potential to drive strong customer engagement and incremental demand across each of these use cases,” said Goyal.

The dining-out business of Zomato is now operating at a run-rate of over $500 million annualised gross order value and is already profitable, said Goyal.