An IPO is usually a time for celebration for a company, but it had brought with it a different sort of problem for Zomato.
Zomato CEO Deepinder Goyal has said that after his company’s top executives became very wealthy following the Zomato IPO, they lost all their motivation to work. Things came to a head that he had to go ahead and replace them.
“I will tell you what happened to us post IPO,” Goyal said at an ET event. “The IPO was good, and the business was doing (well). A lot of people made a lot of money for the first time in their life,” Goyal said. Zomato had been the first major Indian startup to go public, and its stock had nearly doubled in the first few months of going public.
“These were competent people,” Goyal continued. “But they couldn’t realize they were being complacent. They didn’t seek progress any more, and just started filling in the time. These were senior Zomato folks,” he said.
Goyal said that these executives sometimes hadn’t themselves realized that their new-found wealth had changed their attitude towards work. “They didn’t want to tell themselves that they were checked out. They were stalling all the work — they weren’t letting any progress happen. That’s what it came down to — there was no work happening inside the organization for a while,” Goyal revealed.
Goyal said that he had to take steps to change things. “I had to clear out literally everybody who’d lost their drive. I had to restart and reboot the organization,” he added.
This is the first time that Deepinder Goyal has spoken about letting go of the company’s top deck. While Goyal didn’t take any names, four of Zomato’s appointed “co-founders” have quit since the IPO, including Gaurav Gupta, Mohit Gupta, Gunjan Patidar and most recently Akriti Chopra. While it isn’t clear what were the individual circumstances that led to their departures, it seems that Zomato was forced to let go of several senior executives following its IPO. Which just again goes to show that an IPO isn’t the culmination of a business journey — it can often give rise to new challenges that need skill and tact to be tackled.