With huge fund infusions expected— from SoftBank, CTrip etc— in Indian foodtech unicorn Zomato, the company looks right on path for the huge bets these global giants want to make with 40% growth in its revenues for FY18 to $64.49 Mn (INR 466 Cr).
The documents filed with the Registrar of Companies showed that the company controlled its losses by almost 73% to come in at $14.67 Mn (INR 106 Cr) in FY18 as compared to $53.96 Mn (INR 390 Cr) last year.
It is to be noted that these are consolidated financials of Zomato for FY18 which include its subsidiaries’ performances too.
Here are some quick financial updates:
- In FY18, Zomato recorded a total income of $67.12 Mn (INR 485 Cr), a 21.4% increase from $55.26 Mn (INR 399.3 Cr) of FY17
- At the same time, the company posted total expenses of $81.81 Mn (INR 591.4 Cr), a miniscule 1.5% control from $83.13 Mn (INR 600.77 Cr)
- However, among these total expenses, employee benefits $40.18 Mn(INR 290.4 Cr) and other expenses $35.92 Mn(INR 259.6 Cr) saw the most increase of 1.24% and 38.9% respectively, while depreciation was largely controlled by 85.5% from $15.34 Mn(INR 110.9 Cr) in FY17 to $2.21 Mn(INR 16 Cr) in FY18
- It is notable that Loss per equity share fell to Zero after $138.37 (INR 10000) per share in FY17
- In its balance sheet, the company has increased its goodwill from $1.92 Mn (INR 13.9 Cr) in FY17 to $14.68 Mn(INR 106.1 Cr) in FY18, a 663% bump
Some of the standalone updates are:
- The firm saw its standalone revenues grow almost 25% to $53.7 Mn (INR 388 Cr) in FY18 from $42.74 Mn (INR 309 Cr) last year
- Standalone losses for FY18 fell a whopping 86% to $10.86 Mn (INR 78.5 Cr) this time around
- The company saw its total expenses increase only slightly by about 19% to $51.2 Mn (INR 370 Cr) in FY18 from $63.66 Mn (INR 460 Cr) in FY17
- The company spent about $6 Mn of its overall cash burn of $11 Mn for FY18 in February and March alone as it began heavy discounts across markets like Bengaluru, Hyderabad and Chennai where rival Swiggy leads
- For FY18, Zomato saw its online ordering business contribute almost 30% of the overall revenues
- Zomato Gold, which currently has 400K subscribers across 14 cities, formed about 12% of the firm’s revenues
Reports have quoted industry sources to claim that Zomato’s current monthly burn at between $20-22 Mn even as competitor Swiggy burns about $18 Mn each month in the race to the top spot in this industry.
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Further, it is also speculated that Zomato clocks over 13 Mn orders each month while Swiggy clocks over 19 Mn monthly orders.
Earlier in the year in April, Founder and CEO Deepinder Goyal had said that FY18 was a year to demonstrate that the business was heading in the direction of profitability even as the year ended with the firm doubling down on growth and investments towards the same.
“We demonstrated that our business can generate profits — almost throughout the year, we hit EBITDA breakeven globally, across all our business, and while maintaining good growth levels; and then in the last two months, we decided to double down on growth,” wrote Goyal.
However, for the company, FY18 also saw co-founder Pankaj Chaddah’s exit from the company.
The company had earlier adopted a strategy focussed on diversification, and redesigning its ad serving product, it managed to cut losses by 34% in 2016-2017.
In the annual report for FY17, Zomato reported an 80% surge in revenue to around $60 Mn. It further witnessed an 81% drop in the annual operating burn for FY17 at $12 Mn compared to the $64 Mn in FY16.
Recently, Zomato announced its 12th acquisition with foodtech startup Tonguestun. Zomato has acquired four Indian startups (including Tonguestun), which include Bengaluru-based Runnr, a B2B online service provider platform for hyperlocal logistics service; Delhi-based MapleGraph; and a tech-based logistics company named Sparse Labs.
Other global startup acquisitions by Zomato include NexTable, Mekanist, Urbanspoon, Cibando, LunchTime, Obedovat, Menu Mania, and gastronauci.pl.
Recently, reports surfaced that Japanese conglomerate SoftBank’s Vision Fund was examining an investment in either of the two giants — Swiggy or Zomato.
Zomato is also expected to raise nearly $100 Mn from China’s largest travel-booking site, Ctrip, in a financing round that could go up to $400 Mn (Rs 2,800 Cr).
Recently, Ant Financial has secured the right to become the largest shareholder in the company replacing Indian online classifieds company Info Edge.
With continuous cash burn and investors bet for the online food delivery segment in India, which is expected to expand by 34%-36% between 2015 and 2020, Zomato and Swiggy have to keep an eye out for the likes of UberEats and Foodpanda as well.