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Zomato has doubled its revenue and founder Deepinder Goyal says COVID-19 has made the company lean and mean

Jul 10, 2020, 17:38 IST
Business Insider India
Deepinder Goyal, co-founder of ZomatoBCCL
  • Indian foodtech unicorn Zomato has reported a 105% growth in revenue – from $192 million in FY19 to $394 million in FY20.
  • The company has also seen its EBITDA loss widen by 5.7% from $277 million in FY19 to $293 million in FY20.
  • Zomato founder Deepinder Goyal said they expect to make complete recovery over the next 3-6 months.
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Indian foodtech unicorn Zomato has doubled its revenue from $192 million in FY19 to $394 million in FY20. The company has also seen its EBITDA loss has widened by 5.7% from $277 million in FY19 to $293 million in FY20.

“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,” wrote Zomato CEO Deepinder Goyal in a blog.

In the first quarter of FY21, with most restaurants being shut and operating on a takeaway only business, Zomato reported a revenue of $41 million and loss of $12 million.

But Goyal believes that the COVID-19 pandemic has made their business healthy. “In July 2020, we estimate our monthly burn rate to land under $1m, while our revenue should land at ~60% of pre-COVID peaks ($23m per month). We expect to make complete recovery over the next 3-6 months while continuing to maintain tight control on costs/profitability,” he wrote.

While Zomato had laid off 13% of its workforce due to the coronavirus pandemic, 75% of its employees volunteered for partial salary cuts resulting in a total reduction of 14% in payroll costs. However, the original salaries have now been reinstated and the burn rate of July includes the salary costs, said Goyal.

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Meanwhile, Zomato’s FY20 India food delivery Gross Merchandising Volume grew by 108% over FY19. “ In Q1 FY20, we used to make a contribution margin of –₹47 per order; in Q1 FY21, we made a contribution margin of +₹27 per order,” wrote Goyal.

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