Zomato's FY20 revenue grows 105% to $394 mn, loss rises 6% to $293 mn

The Gurugram-based firm had cut 13 per cent jobs in May due to the impact from Covid-19

Food delivery app Zomato said its revenue for the financial year 2020 (FY20) grew 105 per cent to $394 million, while loss rose about 6 per cent to $293 million.  

In its annual report, Zomato said Covid-19 had accelerated the company's journey to profitability, in spite of initial hiccups.

“While Covid-19 has impacted the size of our business, it has accelerated our journey to profitability. In terms of the size of the business, Covid-19 has set us back by a year or so — but a year is only a small blip when you are building a company for the next 100 years. Having said that, Covid-19 has positively impacted the health of our business — we seem to have gained 2-3 years along this vector. In July, we estimate our monthly burn rate to land under $1 million, while our revenue should land at approximately 60 per cent of pre-Covid peaks ($23 million per month). We expect to make complete recovery over the next 3-6 months while continuing to maintain tight control on costs/profitability,” Zomato said in the report. 

The Gurugram-based firm had cut 13 per cent jobs in May as it did not see enough work for all its staff, and asked the entire organisation to take a paycut.

“To quickly reduce our costs during the initial days, we had requested our staff to volunteer for salary cuts. Seventy-five per cent of our employees volunteered for partial salary cuts, resulting in a total reduction of 14 per cent in our payroll costs. As of today, all the original salaries have been reinstated, and our net losses of under $1 million for July reflect the increased payroll cost already,” the report stated.

The food delivery gross merchandise value of Zomato grew to $1,496 million, a rise of 108 per cent over FY19. Dining out saw a revenue rise of 20 per cent to $56.1 million.  “Our dining out business segment is the hardest hit as restaurants remain shut for dining-out – leading to almost negligible revenue across advertising and Zomato Pro. The recovery is going to be slow. Users will be concerned about social distancing and hygiene, and restaurants will need to reorganise themselves to be able to build trust,” Zomato noted. 

The company bought the food delivery business of Uber in India in January for $206 million, leading to a near duopoly in the restaurant food delivery business, with Swiggy being the only other large competitor. 

In the first quarter of FY21, when most restaurants operated only for takeaways, Zomato’s revenue was $41 million, with a loss of $12 million.