Zomato shares up 4% after company shuts down intercity 'Legends' service

The stock opened in the green at ₹260.41 apiece on the NSE, and shortly peaked to a high of ₹269.10. This marked a gain of 4.3% as against the last closing price.

Deepinder Goyal, the co-founder and group CEO of Zomato, took to social media on Thursday to announce the discontinuation of the Legends service.

"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," Goyal posted on social media platform X.

The Legends service, which was aimed at delivering food parcels from one city to another, was launched by Zomato in 2022. Although there was no minimum threshold for the orders when it began, the company later mandated that the order should be worth at least ₹5,000 to be eligible for the intercity delivery.

However, as Goyal mentioned, Zomato did not find the product market fit despite two years of trying.

The announcement from Goyal came a day after Zomato confirmed to the bourses that it is planning to buy the entertainment ticketing business of Paytm for ₹2,048 crore.

While the deal is expected to diversity Zomato's revenue, the same would allow Paytm to further shift its focus on the core financial services business.

On Wednesday, the shares of Zomato settled in the red. The scrip last traded at ₹257.96 on the NSE, down 0.8% as against the preceding day's close.