Zomato expects July net loss under $1mn as Covid-19 hits business
Foodtech unicorn Zomato expects its net loss in July to be under $1 million even as Covid-19 has set it back by about a year in terms of the size of the business, the company said in its annual report on Friday.
For June, it posted EBITDA loss of $1.5 million, while revenue hit $17 million.
Zomato said its revenue in FY20 grew by 105 per cent to reach $394 million as compared to $192 million in FY19 while the costs grew by only 47 per cent in the corresponding period.
For FY19, Zomato posted EBITDA loss of $277 million which increased to $293 million in FY 20.
In the first quarter of FY21, Zomato posted revenue of just $41 million, reflecting how Covid-19 impacted its business size. The company posted $12 million EBITDA loss for the same period.
“Covid-19 has positively impacted the health of our business — we seem to have gained 2-3 years along this vector. In July 2020, we estimate our monthly burn rate to land under $1m, while our revenue should land at approximately 60 per cent of pre-Covid peaks ($23m per month),” said Zomato CEO Deepinder Goyal.
However, he said that the pandemic impacted the size of the business.
“We expect to make complete recovery over the next 3-6 months while continuing to maintain tight control on costs/profitability,” Goyal said.
In the wake of the Covid-19 crisis, 75 per cent of Zomato employees volunteered for partial salary cuts.
“As of today, all the original salaries have been re-instated, and our net losses of under $1m for July reflect the increased payroll cost already,” the Zomato CEO said.
Zomato generally publishes its annual report in the first week of April. But this year it delayed the release of the report due to the uncertainties brought about by the pandemic.