Indian food-tech industry has seen frequent layoff and shutdown last year, So there may be reason to cheer when Zomato, the largest restaurant search and discovery service says it will be operationally profitable by June.
Zomato will also be the first among Indian ecommerce ‘Unicorns’ that are estimated to be worth at least $1billion — to reach this big milestone ahead of Flipkart and Ola.
Started in 2008 by Deepinder Goyal and Pankaj Chaddah it currently operates in 23 countries, including India, Australia and the United States. It features restaurant information such as scanned menus and photos sourced by local street teams, as well as user reviews and ratings. But there is a long road ahead, Zomato is on a drive to continue its focus on food ordering is getting more aggressive now.
Zomato is on course to double its revenue in the current fiscal year ending March 31 and break even at the operating level by mid-2016, cofounder Pankaj Chaddah said in an interview to ET. It expects to overtake Foodpanda and Swiggy to become India’s largest online food ordering platform in two months.
Zomato has 75,000 restaurants listed on its platform in India and works with partners Grab and Delhivery to offer delivery from restaurants.
Chaddah said he expects the business to grow by at least four times by the end of this calendar year to 50,000 orders a day, with an average order value of 550. Zomato’s core ads business, however, will remain its largest contributor, accounting for 80-85% of total revenue, he said.
For 2014-15, Zomato recorded an operating revenue of Rs 96.7 crore and loss before interest, taxes, depreciation and amortisation of Rs 136 crore. That compares with operating revenue of Rs 30.6 crore and Ebitda loss of Rs 41.39 crore for 2013-14. Info Edge (India), the largest investor in Zomato with a 47% stake, is scheduled to announce its annual financial report next week.
Last year, Zomato reduced 300 of its workforce. This was 10% of the total employees which during that time was around 3000 employees. Foodpanda said it had brought down its India workforce by 15 percent.
This month, Zomato which launched its online food ordering business in April 2015, had announced it will be shutting down its online ordering service in Lucknow, Kochi, Indore, and Coimbatore on account of a still nascent market in these cities.
Zomato has so far raised more than $223.8 million as funds and has made 8 acquisitions so far. Zomato plans to spend a whooping $40 million in further expanding the reach of Zomato’s ordering business.
It raised USD 60 million in funding from Singapore government’s investment company Temasek and existing investor Vy Capital.It also invested in hyperlocal delivery startups Pickingo and Grab.
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