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06 Apr 2017

Zomato takes a large bite of the profit pie

Zomato releases "short form" report for big gains

Food start-up Zomato has released an unaudited report of their performance.

According to their blog posting, they have managed to make $49 million in revenue in the fiscal year 2017.

The report said that it was an 80% hike compared to its last year's performance. Zomato also said that they have managed to pull off profits by taking some drastic measures.

In context

Zomato releases "short form" report for big gains
Minimizing the high rate of cash burn

Pocket pinch

Minimizing the high rate of cash burn

The firm said that although they had managed a twofold revenue growth over FY15, it didn't pan out favourably due to their high cash burn of $4.2m a month.

They have finally managed to plug the holes and now their annual operating burn stands at a mere $12m in FY'17 compared to that of $64m in FY '16.

New avenues

Consolidating their businesses

Zomato CEO said a chief concern was to overcome the negative impact of the layoffs that they had to execute in their international markets.

They were also in the learning curve of the online food ordering space and had to think on their feet to overcome stiff competition, which was an added challenge along with the other operations which were hitting roadblocks.

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The app is working wonders for the firm


The app is working wonders for the firm

According to the data shared by Zomato, the average monthly users of their app has seen a jump of 43% and now stands at 53 million.

The number of monthly visits by ardent foodies to the Zomato app stands at 120 million, marking a 69% increase from the data collated in March 2016.

Ad game

Ad revenues saw exponential growth

Zomato's advertising revenue, which was its primary revenue before it joined the food delivery segment, saw a 58% y-o-y growth to $38 million in 2017.

It was cited that there has also been a steep 83% growth in productivity (revenue/headcount) in their ads business.

Zomato said it has stopped taking advertisements from establishments that had poor ratings, so the users get only the best.

Food delivery proved to be a lucrative expansion

Food delivery space

Food delivery proved to be a lucrative expansion

Zomato, ventured in the food delivery space in 2015, has seen an eight-fold growth resulting in $9 million and currently it is competing with Swiggy.

Zomato now has a presence in 13 cities of India and 3 cities in UAE. According to Zomato, they have managed to have clocked a staggering 2.1 million monthly orders in March.


Future plans in motion for Zomato

Zomato has introduced a subscription service called "Zomato Gold" which will be launched in India soon. It will enable its users to make use of exclusive offers in restaurants.

The firm also has plans to create kitchen spaces where there is a lack of a good food joints or restaurants, and also iconic brands whose products will be exclusively sold via Zomato.

Indians love their chicken biryani

According to a survey done by food start-up Swiggy, Chicken Biryani topped the list and was ordered more than any other dishes on their platform in all the major cities like Bangalore, Mumbai, Kolkata, Hyderabad, Pune and Chennai.

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