Ant Group-backed food aggregator Zomato Ltd reported a net loss of Rs 359.7 crore for the quarter-ended March versus a loss of Rs 138.1 crore during the same period in the preceding year. The net loss widened despite a rise in other income to Rs 138.2 cr versus Rs 58.4 crore.
Zomato’s revenue, however, saw a 75% rise in Q4FY22, at Rs 1,211.8 crore vs Rs 692.4 crore year-on-year. Notably, the aggregator’s gross order value for the last quarter of the fiscal has surged to a record high of Rs 5,850 crore, a growth of 77% year-on-year and 6% quarter-on-quarter.
On the operational front, Zomato reported an adjusted EBITDA loss of Rs 224.5 crore for Q4FY22, which has narrowed on a quarterly basis (versus Rs 272.3 crore in Q3) but has nearly doubled on a year-on-year basis (versus Rs 120.7 crore in Q4FY21).
The company claims to have seen tremendous growth, especially during Q3 and Q4 of the financial year 2021-22, as the country crawled back to normalcy from a raging pandemic, giving a boost to dine-out and travel.
“We believe that was a one-time correction of our growth trajectory on the back of two strong quarters. We think our growth trajectory is back on track, and we don’t foresee ‘post-COVID ramifications’ affecting our growth rate anymore,” said Deepinder Goyal, founder, Zomato.
On a free cash flow basis, according to the company’s statement, it saw an outflow of Rs 210 crore in Q4FY22. The company is very keen on conserving cash as it feels that all the necessary minority equity investments have been completed.
Zomato also reported a record number for average monthly transacting customers for the quarter-ended March, at 1.57 crore users versus 98 lakh year-on-year.
For the year-ended FY22, Zomato’s net loss widened to Rs 1,222.5 crore as against Rs 816 crore in FY2021.
However, the food and grocery delivery platform saw its revenue from operations more than double in the period under review, at Rs 4,192.4 crore versus Rs 1,993.8 crore during the year ago.
Goyal said that the minority investments that were made from time-to-time, tap into economies of scale and build unbeatable moats which will serve customers for multiple decades.
He also allayed fears about his personal money being invested in some of early-stage companies and said that Zomato as an entity only invested later after having confidence on the said startup’s growth potential.
“My private investments help me learn, bring those learnings to Zomato, and transform Zomato for the better. During this process, I get to know some founders really well, connect more dots, and sometimes find cultural and strategic synergies with other companies. Over time, multiple threads have to converge before we commit to any strategic investment (or M&A offer) to any company,” said Goyal.
With rumours surrounding a potential buyout of Blinkit where Zomato has invested over $100 million till date, the company said that there’s still a lot of low-hanging fruit to drive growth and efficiency in that vertical.
“Blinkit has grown well in the past six months, and has also significantly reduced its operating losses. We have committed to give them a loan of up to $150 million to fund their short-term capital needs,” said Goyal.
The company has $1.2 billion in cash reserves and out of that the company is not in a mood to allocate more than $400 million in terms of organic investment. Capital needs are currently limited with rapid reduction in losses in the core food business,” a statement said.
Zomato is backed by investors include Sequoia Capital, Info Edge, Alibaba Group’s Ant Financials, Tiger Global, Kora Investments, Nexus Ventures and Temasek Holdings. The company made its stock market debut in July last year.