Gurugram-headquartered restaurant discovery and food delivery firm Zomato posted a threefold jump in its revenue to $206 million for the financial year ended March 31, 2019, compared with $68 million a year ago, on the back of a stronger delivery business.
The company says its current revenue run rate is at $350 million. In its annual report for the financial year 2018-19, the company said its delivery revenue for the year surged four times to $155 million compared with $38 million in FY18. This business now contributes 75% to the company’s total revenue, up from 55% in FY18. Zomato now operates the service in over 200 cities in India, up from 15 cities in FY18.
Zomato, which counts Ant Financial, Sequoia Capital, Vy Capital, Temasek and Info Edge as its investors, said its costs went up more than six times to $500 million in the latest financial year, compared with $80 million a year ago. The company posted losses of $294 million.
“Most of the losses are on account of the food delivery business in India. We have had tremendous growth aided by promotional marketing spends to acquire new users and be the first-to-market in many cities in India. In our experience, being first-to-market gives us a distinct competitive advantage in the food delivery sector,” the company said in the annual report.
Zomato says that unit economics of the food delivery business are looking better. “We now lose ₹25 per delivery, compared to ₹44 per delivery in March ’18. Our last mile cost per delivery is now ₹65, compared to ₹86 in March ’18,” the company said. The key driver metric of unit economics — number of deliveries per rider per hour has gone up to 1.4 from 0.9 last year, it says.
Last month, Zomato said it will raise $62.5 million in a fresh round of funding led by Delivery Hero, a German food-tech major backed by Naspers. Chinese investors Shunwei Capital and Saturn Shine will also participate in the round.
Zomato is present in over 10,000 cities across the globe with over 1.4 million active restaurants on its platform. The company says that it is a market leader in restaurant search and discovery in 19 of the 24 countries that it is in and has 70 million monthly active users on its platform.