Zomato saw a 330% jump in losses during the current financial year ending compare to FY 2019. Zomato had a total loss of Rs 2486 crore in FY 2020. Experts believe that the loss is due to Zomato’s acquisition of UberEats, the food delivery unit of Uber. Revenue wise, the online food delivery platform had a jump of 84% during FY 2020.
Why Zomato is in Loss?
Zomato is the leading online food delivery platform in India. The company earns revenue through advertisement, online orders, and Zomato gold. Zomato is growing in all three departments of the revenue maker. The current financial year Loss is mainly due to UberEats acquisition by a whopping amount of Rs 2485 crore.
The covid-19 lockdown has affected the business severely. A complete lockdown starting from March had brought unavoidable losses to the hospitality industry. People were afraid to deliver outside food. The government also had different restrictions for online food delivery platforms.
To overcome pandemic losses, Zomato also started contactless delivery. Zomato also started supply takeaway services for the users to easily pick their foods.
The company had a new venture [email protected] enterprise. The main objective of this enterprise was to avail the quality food to the office going staffs. Pandemic forced staffs to work from home. this initiative failed very badly. The company also started operation expansions outside India. In 2019, Zomato has marked its presence in countries like the UAE, South Africa, Philippines, Qatar, etc.
To expand its functionalities, Zomato has also started grocery delivery. due to the losses in the Grocery business, Zomato had a plan to sell this new unit. but some media portals called it a rumor.
Zomato Funding and Future Plans
Zomato recently collected $660 million in funding from ten new investors. Tiger Global, Kora, Gifford, and Steadview are the name of key investors who participated in this round. The discussion is ongoing for another $140 million in funding. After the current funding drive, Zomato’s valuations stand at $3.9 billion.
Zomato plans to file for Initial Public Offering(IPO) in mid of 2021. There is no confirmation about the listing country. Most probably, the USA or India will be the listing country for IPO.
New year’s eve brought good business for Zomato. The company claimed 60% higher GMV on 31st December ever. Zomato and Swiggy both recorded the highest orders per minute ever on 31st December.
The new year 2021 has brought some good news for the hospitality industry. Subject Expert Panel formed by the Indian Government has approved Covishield and Covaxin for emergency use related to Covid-19. It may be the beginning of a new era after a difficult pandemic year for all.
