By Tanya Agarwal
Zomato Media Private Limited, parent company of the restaurant search engine Zomato, witnessed an increase of nearly double in its revenues for the Fiscal Year (FY) 2017. The food technology start-up revealed that its revenues increased by a whopping eighty percent. This led to a total revenue generation of $49 million.
The company attributes its success to the growth of the food delivery business in general and to the increase in advertisements specifically.
About the company
Founded in 2008 by Pankaj Chaddah and Deepinder Goyal, Zomato Media Pvt Ltd started off as a restaurant search site and has now moved into the food delivery business as well. It has its operations in twenty-three countries today. The list includes countries like the United States and Australia as well.
The service is based on the concept of regularly updating and gathering information about various restaurants and instigating the food lovers into helping the company in achieving this. This is done through regular sharing of photos and reviews about the restaurants. The company now has a database of over one million restaurants all over the world. The company has more than 2000 employees who are helping the company become a leader in the business.
A hollow victory?
Zomato had been struggling to look for investors and funding. However, recently, Ant Financial, an affiliate of the Alibaba group, took off the burden by investing a large sum of $200 million in the firm. On one hand, the company is increasing its revenues exponentially but on the other, Zomato is having a tough time managing and minimising the costs. Despite a big bump in its revenue collection, the start-up company registered a loss of $5.85 million in the FY 2017.
To add the to the disappointment, Zomato also bore an abnormal expense of 5.25 billion rupees. This major loss was incurred due to the scaling down of operations which were indeed a result of a drop in the value of overseas subsidiaries. In other words, the companys loss increased by a shocking 108 percent.
The company’s take on it
Surobhi Das, the Chief Operating Officer of Zomato Media Pvt Ltd., had earlier revealed in a company blog that they had reduced the cash burn substantially, from $64 million to just $12 million. She admitted that even though the revenue had doubled in FY17 as compared to FY16, it was not an ideal year for the company.
Moving towards innovation
To stay at par with competitors, Zomato recently launched a new table reservation feature called the Zomato Gold. This will also allow the customers to buy an exclusive subscription that will help them to avail offers like happy hours for drinks at various restaurants and pubs. This feature has already been introduced in Lisbon and Dubai. Zomato plans to bring this to India too.
The company is also planning to start kitchen spaces. This will be done at places where the number of good restaurants is very less. This will allow the top brands to serve their food for Zomato.