Zomato targets $30M revenue this fiscal, double of what’s now.
Zomato will clock about $30 million in revenue this financial year, compared with about $16 million a year ago.
Bengaluru, India | Red Newswire | Tue, Nov 10 2015. 06:15 PM IST.
Online restaurant discovery platform Zomato Media Pvt. Ltd aims to double its revenue this fiscal year and turn profits in more countries as it relies on sales of enterprise products that will allow it to turn more cash-efficient in the long run.
“We want to build traffic on our products without spending a lot on marketing and customer acquisition,” co-founder and chief executive Deepinder Goyal told analysts in a conference call Monday.
Zomato plans to push its high-margin enterprise products such as table reservation software and point of sales systems to new markets where the traffic on its site is not adequate to monetize through advertisements as it gears up to become a lower investment business in the longer term.
The Gurgaon-based company said it will clock about $30 million in revenue this financial year, compared with about $16 million a year ago.
Zomato, which started out as a restaurant discovery platform, mainly makes revenue from selling advertisements on its platform. The company has since expanded into online food ordering and table reservation.
The shift in focus to enterprise products will allow the company to keep a check on its customer acquisition costs, which led to the downfall of many food technology start-ups in India.
The industry is in a turmoil as investor interest is fading after a glut of funding in the first half of the year.
Since the start of the year, investors have pumped $165 million into 20 food ordering delivery start-ups. In the last few months, a number of food technology companies have either scaled down operations or shut shop amid stiff competition. Last month, restaurant aggregator Dazo shut down barely a year after it started operations, while Internet-first kitchen Spoonjoy (Emvito Technologies Pvt. Ltd) sold its business to hyperlocal delivery platform Grofers (Locodel Solution). Last week, another food tech startup TinyOwl Technology Pvt. Ltd laid off 100 people and said it is shutting offices in four cities.
Zomato, one of the most well-funded food technology startups in India, laid off 300 people from its global workforce, mostly in the US. It has so far raised more than $220 million from a roster of high-profile investors, including Sequoia Capital, Infoedge India Ltd and Vy Capital.
Even though Zomato has been a late entrant into the food ordering business, Goyal said the company has an “unfair” advantage over its competitors as it taps into the existing traffic on its restaurant discovery platform.
Zomato started its operations in 2008 but it didn’t enter the food-ordering business until the likes of Swiggy (Bundl Technologies Pvt. Ltd) and TinyOwl technology Pvt. Ltd made their presence felt.
“We really wanted someone else to do the job for us. We wanted someone to educate the restaurant owners and users. We think competition has done a good job at that,” Goyal said.
According to him, Zomato hit “a peak of” delivering 10,000 orders a day last week, with an average meal ticket size ofRs.600. The company has also struck exclusive partnerships with about 40% of the 12,000 restaurants on its food ordering platform for three years.
Goyal said the company will turn a profit in eight of the 23 countries in which it is currently present.
Zomato’s expansion has been mainly led by acquisitions. In more than one year, Zomato acquired eight companies, including US-based Urbanspoon and Nextable, Turkey’s Mekanist, Cibando in Italy, Menu Mania in New Zealand, Lunchtime in the Czech Republic and Obedovat in Slovakia.