In the June quarter, Zomato saw losses of $12 million on a revenue of $41 million
Foodtech company Zomato, which saw a massive hit during the COVID-19 pandemic, expects to make a complete recovery of monthly revenue in the next three-to-six months. The management said it is set to cut its monthly burn rate to under $1 million in July compared to $12 million in March.
The statement comes as part of Zomato’s annual report where it also highlighted its performance for FY20. Revenue more than doubled to $394 million, a 105 percent jump from the previous year. The company saw costs grow 47 percent this fiscal, with EBITDA losses growing marginally to $293 million compared to $277 million in FY19.
While FY20 was a strong fiscal for the company, where it also saw its food delivery GMV (gross merchandise value) more than double to $1.4 billion from $718 million in FY19, Zomato said the COVID-19 crisis has already set it back by a year.
"While COVID-19 has impacted the size of our business, it has accelerated our journey to profitability. In terms of the size of the business, COVID-19 has set us back by a year or so – but a year is only a small blip when you are building a company for the next 100 years," CEO Deepinder Goyal said in the report.
In the June quarter, the food-tech company saw losses of $12 million on a revenue of $41 million.
"Right after the rise of COVID-19 cases in India towards the end of March, our food delivery GMV hit its lowest point in two years – GMV was 80 percent down in the last week of March compared to our peak pre-COVID-19 week (in mid-February)," Goyal said.
Zomato said its dining-out business segment was the hardest hit as restaurants remained shut for dining-out, leading to 'almost negligible revenue' across advertising and Zomato Pro (earlier Zomato Gold). However, the company is starting to see a recovery, stating that the food delivery GMV has recovered to 60 percent of pre-COVID levels.
Goyal said the crisis positively impacted the 'health of its business'.
"In July, we estimate our monthly burn rate to be under $1 million and revenue should land ~60 percent of pre-COVID peak ($23 million per month). We expect to make a complete recovery over the next 3-6 months while continuing to maintain tight control on costs/profitability," he said.
Zomato had laid off 520 employees, or about 13 percent of its workforce in May during the COVID crisis, and had also initiated pay cuts across levels. The company said on July 10 that it is reinstating the salaries back to original levels.
"Around 75 percent of our employees volunteered for partial salary cuts, resulting in a total reduction of 14 percent in our payroll costs. As of today, all the original salaries have been re-instated, and our net losses of under $1 million for July reflects the increased payroll cost already," Goyal said.Follow our full coverage of the COVID-19 pandemic here.