Zomato losses balloon ahead of planned IPO

Food delivery and restaurant aggregation platform Zomato saw its standalone net losses widen over 2.5 times to Rs 2,451 crore for the financial year ended March 2020.

The Gurugram-based company’s total expenses grew to Rs 4628 crore in FY20, which marks an increase of 37% from the previous year, regulatory filings show. Employee benefit expenses stood at Rs 621 crore, up from Rs 467 crore in FY19 while advertising promotional spending grew marginally to Rs 1326.6 crore from Rs 1218.2 crore.

Zomato’s standalone revenue from operations doubled to Rs 2336 for the year from Rs 1163 in the previous fiscal.

On a consolidated basis, the company recorded operational revenue of Rs 2605 crore in FY20, up 98% from Rs 1312.5. Consolidated losses for the period stood at 2385.6 crore, up 138% from Rs 1001 crore in FY19.

“Covid-19, pandemic hit us in the month of March 2020, resulting in nation-wide lockdown, which brought down the order volumes significantly and also caused a huge reduction of dine out revenue. 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,” the company said in its filing.

“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 added.

During the fiscal, Zomato had acquired ride hailing app Uber’s food delivery business in India, Uber Eats. 

Last month, it closed a $660 million growth round which valued the company at $3.9 billion.

Zomato has raised over $1.1 billion across multiple rounds since its inception in 2008, as per VCCEdge data.

In September, co-founder and CEO Deepinder Goyal told Zomato employees that the company expected to launch an IPO by the middle of 2021.