zomato

While many Indian food-tech startups are facing difficulties to even survive in this fierce competition, Zomato, the over Billion dollar valued online restaurant discovery and food ordering company, has revealed that it has achieved operational break-even in six countries, which includes perhaps one of the toughest markets for any company to crack — India.

Zomato, which was started in 2008, is currently operating in around 23 countries across the globe. Out of those 23 countries, the company has revealed that it has turned profitable in 6 countries, and believes that it is due to growth in core advertisement business and tighter financial controls.

As per the top executive of the company, Zomato has achieved break even in India, the UAE, Lebanon, Qatar, the Philippines and Indonesia. This news comes at a time when concerns are growing regarding the business model of food tech companies and their potential to scale up business beyond metro cities.

Zomato has been aggressively cutting down expenses and improving its business dynamics since last 6 to 10 months in order to turn the company profitable.

However, it wasn’t easy for the company to achieve profitability. It had to take certain measures for this, including shutting down operations in four cities, laying-off around 10 percent of its staff, among others. But then, these tough but well-calculated measures helped Zomato achieved this extremely significant milestone.

For the year 2014-15, the company recorded operating revenue of Rs 96.7 crore and loss before interest, taxes, depreciation and amortisation of Rs. 136 crore. This year, the company is expecting to double its revenues.

Instead of expanding its operations to other countries, the company is now focusing on monetisation strategies for the countries where it expanded in the last 18 months. And Zomato has in fact already started to do the same.

One among India’s first generation of unicorns, Goyal, in December last year, had announced his company’s plans to move aggressively into the food ordering business. He had further stated, that his company is now looking to invest as much as $40 Million in a bid to expand its current food ordering business in other countries.

Investment too, is on the way for the restaurant discovery-to-everything platform, as Baidu recently made public, its plans to invest in three of India’s most promising and biggest success stories — Zomato, BookMyShow and BigBasket. Like most Chinese tech companies, Baidu’s focus at present is upon growing its mobile business, making O2O commerce — a significant portion of which takes place via mobile based commerce — an obvious priority.

Founded by Pankaj Chaddah and Deepinder Goyal in July 2008, Zomato entered the online food delivery business last year. As per the company, it gets 22% of its traffic and 35% of its overall revenue from India. It claims to receive over 10 million monthly unique visitors and serves over 15,000 orders a day at an average ticket price ofRs.575.

Deepinder Goyal, co-founder and chief executive of Zomato, said,

We have more than doubled our revenue year-on-year for the last few years, and we are going to post some great growth numbers this year as well. We are profitable in six of the 18 markets we are the market leaders in.

Pankaj Chaddah, co-founder of Zomato, said,

We can now channelize the profits to grow faster and compete harder in countries where we see significant competition. It’s a great thing that we don’t fully depend on external funds to fuel all the experiments and initiatives that we have undertaken in India and elsewhere.

In India, it competes against the players like Rocket Internet’s Foodpanda and local startups like Swiggy and TinyOwl in the delivery business.


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