Online food ordering and discovery platform Zomato witnessed a high revenue growth over the last one year, but expenses rose at a much faster pace. The Gurgaon-based company saw its total revenues shoot up from $68 million in2017-18 to $206 million in 2018-19, primarily driven by the delivery vertical, according to the company’s annual report.
Zomato spent $500 million in 2018-19, a six times jump from $80 million in the previous year.
The company claims its annual revenue run-rate to be around $350 million, which is usually calculated based on the highest monthly revenue number.
While the delivery business has been a major contributor to the company’s revenue, it has also led significantly to Zomato’s losses of around $294 million.
According to the company, it has improved its unit economics over the last financial year. In 2017-18, the company used to spend around ₹44 per delivery, in 2018-19, Zomato reduced it to ₹25.
“Unit economics of the food delivery business has come a long way,” according to the annual report. “The key driver metric of unit economics — number of deliveries per rider per hour — has gone up to 1.4 from 0.9 last year.”
The company’s financials come at a time when Zomato is locked in an intense battle for market leadership with Swiggy.
Zomato Media, which owns the online food delivery and restaurant discovery platform, sold its UAE food delivery business to Germany’s Delivery Hero Group for about $172 million.
In contrast, its biggest competitor Swiggy secured $1 billion in a round led by South Africa’s Naspers, valuing the company at $3.3 billion.
This article was first published on livemint.com