Zomato’s FY20 losses surge 330 pc while revenue jumps 84 pc ahead of IPO this year

Online food ordering company Zomato has reported a staggering 330 per cent jump in its losses for the financial year 2019-20. On the other hand there has been an increase in its revenue (84 per cent) from the preceding FY.

Swiggy’s arch-rival Zomato, led by Deepinder Goyal, saw losses mounting from Rs 570 crore in FY19 to Rs 2,451 crore amid 48.8 per cent increase in expenses from Rs 3,109 crore to Rs 4,627 crore during the said period, according to the regulatory filings sourced from business intelligence platform Tofler.

On the other hand, the company, backed by Alibaba’s Ant Financial, Tiger Global and others, managed to push its revenues up from Rs 1,350 crore in FY19 to Rs 2,485 crore in FY20.

In its filing Zomato has said that while its other businesses are gaining traction, the primary revenue sources for it are ad sales, online ordering, and Zomato Gold business segments. It added that the unit economics in online ordering improved significantly with increased revenue, lower logistics cost and user discounts. Further its “huge focus on efficiencies and bringing down costs helped bring down the overall burn rate significantly.” During FY20, Zomato had also acquired Uber Eats to “become the market leaders in the delivery business.”

Covid-19, which hit the online food delivery segment in March 2020 due to the lockdown, had brought Zomato’s order volumes down significantly and also caused a huge reduction of dine out revenue, according to the company. Since then, Zomato had introduced services such as contactless dining and delivery takeaway products in certain geographies outside of India to address the Covid-related losses.