Zomato turns 11: Founder and CEO Deepinder Goyal on Zomato Gold, logout campaign, and food delivery
Foodtech unicorn Zomato completed 11 years on July 10, this year. Co-founded by Deepinder Goyal and Pankaj Chaddah in 2008, Zomato launched its operations by scanning and putting restaurant menus online.
The company diversified itself from restaurant search company to food delivery company, and currently, the startup has expanded to 24 countries and serves 10,000 cities globally.
On the wake of the anniversary, CEO Deepinder Goyal in a blogpost said the company celebrated its 11th anniversary and every anniversary "makes us proud of what we have achieved yet, acutely aware of how much there is left to do."
The food delivery platform is backed by Silicon Valley venture fund Sequoia Capital, Singapore Government's Temasek Holdings and Indian ecommerce player Info Edge.
Deepinder Goyal, Co-founder and CEO, Zomato
Outlining the first half of FY20 journey, the Gurugram-based unicorn has shared some interesting insights.
The company that turned unicorn in 2018, said that it's burn rate was down 60 percent of what it was six months ago. Zomato clocked a revenue of $205 million in the first half of FY20, which exceeded a total of $206 million in revenue for FY19. However, it reported a loss of $294 million in FY19. As on September 2019, company's EBITDA loss dropped by 40 percent than March 2019.
"We achieved tremendous results in optimising our costs, without affecting new product launches or innovation," Deepinder said, adding that "we will shoot for market leadership, and simultaneously steer the business towards a more sustainable P&L."
Currently, Zomato has three business segments, Food Delivery, Dining Out, and Sustainability.
In May 2015, Zomato launched its online ordering and food delivery services with Delhi-NCR followed by Bengaluru, Mumbai, Hyderabad, Pune, and Kolkata. By April 2019, it had expanded the service in 200 cities. Today, it offers food delivery service in over 500 cities across India.
The order volumes in the top 15 cities have doubled in the last 12 months, while the remaining cities already contribute 35 percent to order volumes.
"Our food@work business is growing well, and some very large accounts are slated to go live soon. We are already doing 3 million orders a month for food@work, which is in addition to the orders reported in the chart below," Deepinder added.
Zomato also claimed that its average monthly transacting users have increased by 211 percent to 11.2 million users in H120, as compared to the same period in FY19. While, the average monthly active restaurants have increased by 177 percent to 119K restaurants.
Known as the 'backbone' of Zomato's operations by the CEO, the average monthly active delivery partners also saw a spike of 308 percent in the first half FY20. Currently, there are more than 200K delivery partners associated with the food aggregator.
Zomato also shared an interesting infographic with trivia of its delivery partners, such as Chennai having the largest women delivery partner to Gurugram having the oldest partner at the age of 60 years, among others.
Restaurant listing, Zomato Gold, and Logout Campaign
The number of restaurant listings globally on Zomato has grown from 1.2 million in September 2018 to 1.5 million in September 2019. "Half of this increase comes from India alone," Deepinder said.
In April 2015, the food aggreagtor acquired the US-based restaurant reservations and table-management platform NexTable, in a cash and stock deal to start providing this service to its users. Soon after in January 2016, it launched its own restaurant reservation service known as Zomato Book.
On the table reservations front, Zomato has grown from 800K booked covers in January 2019 to 1.3 million booked covers in September 2019, organically and with zero investment, the CEO stated.
Its flagship product, Zomato Gold, saw its members increasing to 1.4 million. According to the FY19 report, Zomato had one million active subscribers of Zomato Gold globally, in the month ended March 2019. While less than five percent restaurants participate in Zomato Gold, less than five percent of Zomato's monthly active users (MAUs) are Gold members.
The cities dotted with Zomato Gold have increased to 54 as on September 2019, as compared to 20 in September 2018.
From a restaurateur point of view, Gold is not for everyone, Deepinder said, adding that,
"We always encourage restaurants to determine if participating in Zomato Gold makes commercial sense for them. Some restaurant owners in India campaigned against Zomato Gold last month (#logout campaign); we engaged with the restaurant owner community and rolled out some changes to the program that were widely accepted by most restaurants, as well as users – thus creating more balance in the program. A number of restaurants who have returned to Zomato Gold post these changes have seen a 100 percent increase in revenue."
At the start of the ‘#logout campaign', Zomato had 6,100 restaurants on Zomato Gold in India. Currently, it has 6,300 restaurants on its flagship product in the country. "The number of restaurants participating in Gold outside of India stands at 6,500," Deepinder added.
In the past six months, Zomato has executed over 65,000 orders for 2,200 restaurants across Delhi and Bengaluru. The food aggregator acquired Hyperpure in 2018 to provide fresh and clean ingredients to its restaurant partners and the revenue from its warehouses in H120 stands at $6.5 million, as compared to zero in H119, with a FY20 projection of 10x growth.
In July, Zomato started collecting used cooking oil (UCO) from restaurants, processed and delivered it to biodiesel manufacturing facilities. The company collects 130 tonnes of used oil per month, from about 1,000 kitchens in Delhi-NCR, and will expand operations to five more cities this October.
(Edited by Suman Singh)