Zomato’s loss widens to Rs 430 cr as delivery costs rise


Online food delivery platform Zomato on Wednesday declared that its consolidated loss widened to Rs 430 crore for the quarter that ended on September 30, and increased delivery cost was one of the main reasons.

The company, which went public recently, had posted a loss of Rs 229 crore in the same period last year.

According to CEO Deepinder Goyal, the losses went up owing to investments in the growth of its food delivery business.

“Three reasons to be specific – a) increased spending on branding and marketing for customer acquisition, b) increased investments and growing share of smaller/emerging geographies in our business (which are less profitable today compared to more mature cities) and c) increased delivery costs due to unpredictable weather and increase in fuel prices,” Goyal said in a statement.

Adjusted revenue for Zomato stood at Rs 1,420 crore ($189 million), a 22.6 per cent growth (on-quarter) and 144.9 per cent growth (on-year).

“We don’t expect the delivery costs to go up further and overall feel confident about our Contribution margin staying positive in the mid, as well as long term,” Goyal pointed out.

The company also announced that it has invested $75 million in Bigfoot Retail Solutions Pvt Ltd (Shiprocket) for a 8 per cent stake as part of a larger $185 million round.

Shiprocket is a B2B logistics-tech company that enables online commerce by providing seamless shipping and fulfillment services to direct-to-consumer (D2C) brands and omni-channel sellers.

“We have also signed definitive documents for investing $50 million in magicpin for a 16% stake as part of a total round size of $60 million. magicpin drives omni-channel growth for local retailers,” Zomato said.

The company had earlier invested $100 million in Grofers.

“We have now committed $275 million across 4 companies over the past six months. We plan to deploy another $1 billion over the next 1-2 years, with a large chunk of it likely to go into the quick-commerce space,” Goyal said.

Overall customer traffic on Zomato in India increased to 59 million average monthly active users (India MAU) in Q2 FY22, as compared to 45 million in Q1 FY22.

“As we head into the festive season, we believe that almost all the restaurants across the country are open for business today,” Goyal added.

Zomato is seeing a 30 per cent higher ordering frequency and significantly higher contribution margin in cities which have a meaningfully higher arestaurants per 100k customers’ metric.


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