Zomato posts $74 M revenue in FY18, pulls down cash burns

Maintaining its control on cash burn, Zomato was able to bring down its burn from $15 million in FY17 to $11 million in FY18.

Online foodtech and restaurant discovery firm Zomato posted a revenue of $74 million for FY18, up 45 percent from its previous year revenue of $51 million.

In a blog post, CEO Deepinder Goyal wrote, “We demonstrated that our business can generate profits – almost all throughout the year, we hit EBITDA break-even 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”.

Maintaining its control on cash burn, Zomato was able to bring down its burn from $15 million in FY17 to $11 million in FY18. A significant part of this cash burn, about $6 million, was seen in February and March – during which Zomato raised $150 million in funding from Alibaba’s payment affiliate Ant Financial.

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In terms of food ordering, Goyal wrote, “In FY18, food ordering comprised about 30 percent of our revenues, up from 18 percent in FY17. We are now live in food ordering in 15 cities in India and five cities in the Middle East. We hit about 5.5 million monthly food orders in March 2018."

Recently, Zomato announced that it hit the annualised revenue run rate in March and register a 40-percent growth in the last two months. The company disclosed that as on March 31, 2018, its subscription-based programmes Zomato Gold and Zomato Treats have 280,000+ active users.

Speaking about Zomato at a recent earnings call, InfoEdge CFO Chintan Thakkar said it has been on a high growth trajectory and it is not spending a lot to achieve this high growth trajectory. InfoEdge is one of the major shareholders in Zomato, and recently sold 15 percent of its holding in Zomato to Alibaba group company Ant Financial for a consideration of $50 million. InfoEdge currently owns more than 30-percent stake in Zomato.

While Zomato might be performing on good unit economics, the stiff competition from Swiggy and Foodpanda, which has now been cash replenished after its takeover by Ola, would test Zomato’s way of doing business. While Swiggy raised $100 million recently, Ola acquired Foodpanda with a fund infusion to the tune of Rs 1,300 crore from parent ANI Technologies Pvt Ltd.