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Zomato reports $49M revenues for FY17; Food ordering $9M in revenue

Zomato has reported revenues of $49 million for the financial year ended 31st March 2017 (FY17), a growth of 80% over FY16. The company said that for the month of March 2017, it had around $5 million in revenues. Some data:

  • Food ordering: For the year FY17, food ordering accounted for $9 million in revenues, around 8 times of FY16. It has food ordering services now in 13 cities in India and 3 in the UAE. Zomato is planning to launch food ordering in Beirut next. Zomato says it reported 2.1 million monthly orders in March, which was four times the order volume in March 2016. Importantly, this was with positive unit economics, and net margins on an order are around 55%. Mukund Kulashekaran leads Zomato’s food ordering business. While the growth appears impressive, it’s important to note that Zomato was fairly new to food ordering in FY16, so the baseline would be comparatively low. A few days ago, Zomato said that its average order value is Rs 430 in India, and AED 62 in the UAE. Also remember that Zomato prefers to let restaurants do the delivery, where it makes an average commission rate of 8.5%. Around 90% of orders delivered are by restaurants, in an average of 38 minutes.
  • Ad sales: accounted for $38 million in revenues in FY17, 58% higher than FY16. Zomato says it stopped advertising from low rated restaurants around mid-year, and redesigned their product to improve targeting and visibility for advertisers. This was rolled out globally in September 2016. For the ad sales team, revenue/headcount grew 83%. Note that Zomato hasn’t provided data in number of listings. Last year, the company had pointed to volume in listings, pointing towards scale, and hence lower dependency on entities like Domino’s: “65% of restaurants in Pitampura advertise with us”, and that more than 50% of listings in Haus Khas in Delhi as advertisers, while, “Chains like Dominos etc, they spend 40% of the restaurant advertising spend in the country, and they are 2% of our revenue.”

“We’re well on our way to profitability,” the company said in a blog post, with the average monthly cash burn for the period of December 2016 – March 2017 a little less than $250k globally, down from $4.2m last March. Zomato says it has reduced its annual operating burn substantially from $64 million in FY16 to $12 million; note that it had reported $75 million in losses in FY16, which it says “included a significant amount of non-operating burn i.e. non-cash items – depreciation, amortization and non cash provisions”.

Cash burn in FY16, Zomato said, was an average of $4.2M, despite 2x revenue growth over FY15, which it says was a tough time for the company, since it was rationalising its international operations, had layoffs, and was relatively new to the online food ordering space, where, “there was a lot to learn in order to stay ahead of competition.” The company has not shared details of its headcount, which, in May last year was around 1900, with 1250 in India. Note that for the quarter ended December 2016, Zomato reportedly had a burn rate of around $1 million per month, with a runway of 2-2.5 years, according to its investor Info Edge.

Do remember that Zomato competitor Swiggy is still around, around 10 months after Zomato founder Deepinder Goyal said food delivery competitors have only 6-9 months left. (Yes, Deepinder, we’ll keep tracking this. Just for fun.)

International business?

It’s worth noting that Zomato makes very little mention of its international business: remember that its acquisition of Urbanspoon was a big deal, and last year, Goyal kept emphasising that Urbanspoon was acquired for the Australia market. There’s absolutely no mention of Australia in this update from Zomato.

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Zomato claims 120 million monthly visits in March 2017, up 69% over march 2016; and 53 million monthly active users over March 2016.

Zomato’s recent launches

  • Zomato Gold: a subscription service, was launched in Lisbon and Dubai last month.
  • Cloud Kitchen: for providing partner restaurants with a kitchen in a city they aren’t based in. Zomato has plans to expand this to 100 locations by end of 2018. So far, this is being provided free to partner restaurants as a part of Zomato Infrastructure Services. This was launched a month after Zomato competitor Swiggy launched its own kitchen services.
  • Zomato Base: its point of sales product, is undergoing paid beta trials at over 200 restaurants. Zomato expects an increased adoption of Base in India, UAE and other markets in the coming year. Samir Kuckreja leads Zomato Base.
  • Table Reservations: In a blog post four weeks ago, the company said that six months ago, they opened reservations for the top 1000 most visited restaurants in Delhi on Zomato, and in 30 days clocked 16,500 reservations. Zomato now offers table reservations across 24,000 restaurants in 12 cities, and in March, reported 600,000 reservations. Gaurav Gupta leads Zomato’s Table Reservations business.

Updates: Added data from Zomato’s last blog post

Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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