Zomato cuts monthly burn rate to 60%; revenue up three-fold to Rs 1,458 cr

Online restaurant guide and food ordering platform Zomato on Tuesday said its monthly burn rate is down to 60 per cent of what it was six months ago.

"We achieved tremendous results in optimising our costs, without affecting new product launches or innovation," Zomato founder and CEO Deepinder Goyal said in a blogpost on the business performance report for the first half of 2019-20.

The company has also witnessed over three-fold jump in revenue to $205 million (around Rs 1,458 crore) for April-September 2019 from $63 million (around Rs 448 crore) in the same period a year ago, he added.

The company however did not provide any details about the losses it incurred during the period under review or in the corresponding period of the last fiscal year.

On the business segments, Goyal said in the 'food delivery' segment, in April 2019, the company was present in 200 cities.

"Today, we offer our food delivery services in over 500 cities across India, and are contribution margin positive across the country," he added.

The company's order volumes in top 15 cities have doubled in the last 12 months, while the remaining cities already contribute 35 per cent to its order volumes, Goyal said.

In the segment of 'Dining Out', the number of restaurant listings globally on Zomato has grown from 1.2 million in September 2018 to 1.5 million in September 2019, he added.

"Half of this increase comes from India alone this huge increase is testament to the pace at which restaurants are mushrooming all over India, and grabbing share from home kitchens," Goyal said.

In table reservations, Zomato has grown from 800 thousand booked covers in January 2019 to over 1.3 million booked covers in September 2019. The growth has been achieved organically and with zero investment, he added.

Talking about its Zomato Gold programme, Goyal said : "Gold takes the Zomato experience one notch further from discovery to loyalty. We now have 1.4 million members worldwide on Zomato Gold; who are using their privileges more than thrice a month. Gold is a niche, but large loyalty program."

From a restaurateur point of view, Gold is not for everyone, he added.

"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," Goyal said.

A number of restaurants who have returned to Zomato Gold post these changes have seen a 100 per cent increase in revenue,he added.

Goyal also said at the start of the 'logout' campaign, Zomato had around 6,100 restaurants in India on Zomato Gold (for Dining Out). As of today, it has around 6,300 restaurants on Gold for Dining Out.

In addition to that, Zomato has 10,000 restaurants that are participating in recently launched Zomato Gold for delivery. The number of restaurants participating in Gold outside of India stands at 6,500, Goyal said.

On the 'Sustainability' segment, Goyal said Zomato had set up Hyperpure to not only provide fresh and clean ingredients to its restaurant partners, but to also reduce wastage and inefficiencies in the supply chain.

"In the past six months, we have successfully executed over 65,000 orders for 2,200 restaurants across Delhi and Bengaluru. On an average restaurants place 5-7 orders every month, with an average order value of $100," he added.

The revenue from Hyperpure for April-September stands at $6.5 million with a hearty 2019-20 projection, Goyal said.