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Indian foodtech Zomato ends premium service in Indonesia

About 100,000 bars and restaurants have closed in the country

Zomato recently raised $62 million from Singapore state investment arm Temasek Holdings at a valuation of $3.25 billion.   © Reuters

JAKARTA -- Indian foodtech unicorn Zomato has ceased operation of its premium service in Indonesia, the company announced on Twitter.

With the winding up of its Zomato Pro service, premium users can no longer enjoy the benefit of exclusive offers from restaurants, cafes, and bars. However, they will be able to access the free Zomato search on its app.

"Zomato pro is available till Nov. 30, 2020 or your membership's expiration date, whichever is earlier. After this date, you can use Zomato to search and discover your favorite restaurants to dine out," the company said in response to a query on Twitter on Wednesday.

The company's website in the archipelago states that "Zomato Pro is currently not available in Jakarta".

And, it's not Indonesia alone. The Indian startup has reportedly put up the shutters for its premium subscribers in the Philippines' market as well. According to a report by Rappler, the company made the announcement on its email to its premium users.

The move comes at a time when the food industry has been hit hard by the pandemic. In India for instance, both Zomato and its rival Swiggy are staring at a severe business and revenue loss over the past few months as people continue to remain skeptical about eating out as the coronavirus fear looms large.

In Jakarta, which is undergoing the second phase of social distancing measures since the virus struck, almost all restaurants and eateries have been forced to close their dine-in services.

According to the National Restaurant Association around 100,000 bars and restaurants have closed, with 15% of them winding up permanently.

For its premium subscription, Zomato Indonesia has already started offering refunds, which it says will be processed within 15 to 30 working days.

"You will receive your membership funds back as stated in the email/application via the account (debit/credit) that you used to buy membership gold/pro," reads an announcement on Twitter.

Interestingly, the development comes a month after Zomato raised $62 million from Singapore state investment arm Temasek Holdings at a valuation of $3.25 billion.

The company is also in preliminary talks to raise a fresh tranche of funding from venture capital fund Mirae Asset-Naver Asia Growth Fund as DealStreetAsia had reported earlier.

In May, Zomato announced that it will let go of 13% of its staff, affecting close to 520 employees. To curtail losses, the company has even started grocery delivery services across India.

For the original story from DealStreetAsia, click here.

DealStreetAsia is a financial news site based in Singapore that focuses on private equity, venture capital and corporate investment activity in Asia, especially Southeast Asia, India and Greater China. Nikkei owns a majority stake in the company.

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