Foodtech major Zomato’s losses went up by 160% for the year ending March 31, 2020, the company’s regulatory filings show. The company’s losses went from Rs 940 crore in the previous year to Rs 2,451 crore.
Its revenues went up by 84% year-on-year, and came in at Rs 2,486 crore. According to reports, the company’s main sources of revenue were ad sales, Zomato Pro and online ordering. “Unit economics in online ordering improved significantly with increased revenue, lower logistics cost and user discounts,” the company reportedly stated in its filing.
The losses could potentially be attributed to the company’s acquisition of UberEats in India, which is acquired reportedly for Rs 2,485-crore. The acquisition, it said, was to become “market leaders in the delivery business”. Its losses could also be because its costs went up — employee benefit expenses, finance costs and other expenses — all went up. Overall, its costs saw an increase of 37%.
According to reports, the firm said in its annual report that COVID-19 had hit business hard (ordering in was not allowed in many cities and volumes had significantly dipped).
The firm took a hit because revenue from dine-out business came to a halt. Zomato’s ‘food@work’ business was also hit because of Covid-19, as most people transitioned to working from home. This, Zomato said, has resulted in trimming down the business in line with current market requirements.
“We are working on a number of products to address this loss, like introducing contactless dining and delivery / takeaway products in certain geographies outside of India,” it said.
“Business is shaping up well and the management team is focused to improve the product continuously striving to focus on customer satisfaction and ensuring to grow without compromising on profitability,” it reportedly added.
This comes ahead of Zomato’s plans for an IPO.
Last month, CEO Deepinder Goyal tweeted that the company had raised money from 10 new investors, and that it had closed a $660m primary financing round at a post-money valuation of $3.9 billion. The investors include Tiger Global, Kora, Luxor, Fidelity, D1 Capital, Baillie Gifford, Mirae, and Steadview.