Zomato sees burn rate reduce by 60%, clocks $205m in H1FY20 revenue

Photo: Zomato

Online food ordering and discovery platform Zomato said that its revenue for the first half of financial year FY 2019-2020 (H1FY20) touched $205 million, up from $55 million reported in the same period last year, driven by an increase in order volumes on its delivery business, according to the company’s half-yearly report released on Tuesday.

The Gurgaon-based company’s ‘dining out’ business which includes restaurant listings, reviews, and table reservations (including Zomato Gold) accounted for around 13% of Zomato’s overall revenues at $27.3 million in H1FY20. In the same period last year (H1FY19), Zomato’s ‘dining out’ business reported revenues of $23.8 million.

Zomato’s annual revenue for its financial year ended March 2019 (FY19) stood at $206 million, for which it spent around $500 million in expenses, which was a six-fold jump from $80 million in expenses reported in FY18.

However, in the first half of FY20 (H1FY20), the company claims to have reduced its burn rate by 60% compared to the six-month period in H2FY19. As per industry sources both Zomato and Swiggy were burning anywhere around $50-$60 million every month. A person directly aware of the company operations told Mint that the Zomato’s burn rate is now at $20 million per month.

Additionally, Zomato claimed in its report that EBITDA Loss for H1FY20 was 40% lower in September 2019, compared to March 2019, although the company did not share loss figures on its half-yearly report.

Zomato had let go around 541 employees (or 10% of Zomato’s strength) across its customer support team in Gurgaon, stating improvement in technology in areas such as after-sales support and other customer support-related functions.

During H1FY20, only 6 in every 100 delivery orders required after-sales support, compared to 22 orders (out of every 100 orders) in the same period last year, according to the company’s half-yearly report.

As of April 2019, Zomato’s food delivery business was operational in 500 cities in India. In H1FY20, Zomato completed around 214 million orders, compared to just 55 million orders in the same period last year. Subsequently, its GMV on the delivery segment went up by more than 220% in H1FY20 touching $821 million.

“Our order volumes in top 15 cities have doubled in the last 12 months; while the remaining cities already contribute 35% to our order volumes” the company said in a statement.

Apart from this, Zomato’s business-to-business (B2B) product food@work, which offers digitized cafeteria outlets at around 70 organizations, is already undertaking around 3 million monthly orders.

The number of restaurant listings globally on Zomato has grown from 1.2m in September 2018 to around 1.5 million in Sep 2019, with more than half of the base coming from India. Global table reservations business grew from around 800,000 reservations in January 2019 to more 1.3 million reservations as of Sep 2019.

The number of active members on Zomato’s controversial Gold programme increased to 1.4 million subscribers as of September 2019, up from around 500,000 users in the same month last year. The recent ‘logout’ campaign which saw several restaurants across the country logging out from Zomato’s Gold programme has seemingly not affected the Zomato Gold base.

Zomato claimed in its report that at the start of the ‘logout’ campaign, it had approximately 6,100 restaurants in India on Zomato Gold (for Dining Out). As of October 2019, Zomato’s base of Gold restaurant partners increased to around 6,300.

In addition to that, Zomato also claimed that around 10,000 restaurants that are already participating in recently launched Zomato Gold for delivery. The number of restaurants participating in Gold outside of India stood at 6,500 restaurants at the end of H1FY20.

The article was first reported on Livemint.com 

 

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.