We are getting to know some fresh financial numbers from food delivery unicorn Zomato, as it nears its expected IPO time. Revenues for the financial year 2019-20 have increased exponentially from the previous year, now standing at ₹2,743 crores. However, profitability is still a far fetched dream for the Deepinder Goyal led company, as losses have swollen up from 2019 as well, to be ₹2,386 crore. Overall, the company reported its total expenses in the financial year to be ₹5006 crores. These numbers have come to light through Zomato’s periodic regulatory filings.
The Gurgaon based unicorn’s share capital went up from ₹272 crores to ₹422 crores. All of this comes amid an increased IPO buzz and a $660 million funding round that the company was able to close, despite this being the year that it has been.
2020 was a bolt out of the blue for the delivery delivery sector, and its effects on Zomato is signified in these numbers. The staggering loss is mainly due to the nationwide lockdown that was imposed due to the COVID-19 pandemic, as well as rising expenses.
The lockdown reduced order volume significantly throughout most of 2020. Moreover, as most workplaces also remain closed, the ‘food@work’ business of Zomato, under the entity Tonguestun Food Network Private Limited, also saw losses mount up.
To add to those expenses, Zomato also bought the India business of Uber Eats back in January 2020 for $206 million and a 9.9 percent stake in the company. This led to increased expenses, and thus, played a huge part in the staggering rise in losses that we see today.
To salvage the solution, the company had decided to trim down costs and lay off employees based on market requirements. This was also accompanied by decisions on whether cities that are not profitable, should continued to be on the roster or not. And even though Zomato did shut down service in a few cities, that does not seem to have shown in the rising losses that have come to light.
Nonetheless, the rise in revenue, in a year ravaged by a global pandemic is a good sign, and may help Zomato in its IPO, which will reportedly happen this year.
The foreign exchange inflow was reported as ₹270 crore and the outgo was ₹252 crore. The filings also state that directors of the company expect the overall business of the company will improve in the coming years, thanks to a focus on future market research and increasing the operational efficiency.