Foodtech major Zomato has announced its financial results for FY20 and the first quarter of FY21. The Gurugram-based venture has claimed that its revenues grew by 105% to $394 million in FY20 from $192 million in the previous fiscal. As per the blogpost on the company’s website, Zomato’s EBITDA losses rose by 5.5% to $293 million in FY20 from $ 277 million in FY19.
The company also announced that the gross merchandise value(GMV) or the total value of the foods sold in its food delivery business in India also doubled from $718 million during FY19 to nearly $1.5 billion in the fiscal ended in March 2020.
Over 2X growth in revenue, GMV, and reduced rate of expense growth are good signs for the Ant Financial-backed venture that has been focusing on improving unit economics. Both Zomato and Swiggy had lost much money in 2019 to command more market share in India.
For many months, the duo has been spending $20-$30 million monthly. As per Zomato’s blog post, the company has estimated that its monthly burn rate will land under $1m as compared to pre-COVID peaks of $23m per month.
“ In July 2020, we estimate our, while our revenue should land at ~60% of We expect to make a complete recovery over the next 3-6 months while continuing to maintain tight control on costs/profitability.” said Deepinder Goyal, CEO of Zomato.
The Covid-19 pandemic has forced both foodtech majors to bring down cost and prioritize profitability. Zomato and Swiggy also laid-off employees and downsized cash guzzling verticals. Zomato had pulled the plug from grocery delivery service while Swiggy had downsized cloud-kitchen division to half.
While the GMV of Zomato was down by 80% during lockdown, it now claims to recover to 60% of its pre-COVID levels. “The unit economics of our food delivery business have improved consistently over the last 18 months. In Q1 FY20, we used to make a contribution margin of –Rs 47 per order; in Q1 FY21, we made a contribution margin of + Rs 27 per order,” said Zomato in a blog post.
Zomato’s dining out business has also recorded a growth of 20% to $56.1 million in FY20 as compared to $46.5 million in FY19. It also added 700K Gold Pro (formerly Zomato Gold) in FY20.
The company’s B2B restaurant supplies subsidiary Hyperpure recorded eightfold growth in revenues which grew from $ 1.8 million in FY19 to $14.7 million in FY20. Zomato claims that at present 2286 restaurants source their supplies from Hyperpure.
The food delivery major has disclosed that these numbers are based on the company’s internal management information system(MIS) and may vary from actual figures as per Indian auditing standards. While the announced results seem a decent improvement in Zomato’s financial health in FY20, Fintrackr will delve deeper into its audited financial statements for FY20 are out.