Zomato Ltd. is seeking a valuation of up to Rs 60,000 crore as the food ordering and delivery platform looks to raise capital for expansion.
Highest-Ever Gross Orders In Q4
While gross orders hit the lowest level in two years in the first quarter of FY21, the business saw a strong rebound. Gross orders rose 91.6%, 42.3% and 11.1% in the second, third and fourth quarters.
At Rs 3,313 crore, the metric hit a record in the fourth quarter, according to its prospectus. And the second wave of Covid-19 pandemic did not impact the company's food delivery business in India, it said.
Overall, the gross orders fell to Rs 9,483 crore in FY21 from Rs 11,220 crore a year earlier.
Zomato’s average order value has come down to Rs 394 in the quarter ended March from Rs 407.8 in the preceding three months.
The number of monthly active users fell 23% to 3.2 crore in FY21, down from 4.1 crore a year earlier.
Monthly transacting users are have not gone back to pre-pandemic levels.
Making Money On Every Order, But..
Zomato charged 75% more on delivery and earned 44% more commission in FY21. And as orders surged, delivery costs fell 12% and it also slashed discounts by 62% per order.
From making a loss of Rs 30.5 per delivery in FY20, it earned Rs 20.5 in FY21.
Zomato, however, expects losses to increase given its investment in growing its business.
“We have expanded and expect to continue to expand substantial financial and other resources on advertising and sales promotion costs to attract customers and restaurant partners to our platform,” the company said in the RHP. The platform will invest adding offerings, develop or acquire new features and services, expand into new markets in India, and add more delivery partners.
Zomato has sought the Competition Commission of India’s approval for acquiring around 9% stake in grocery startup Grofers. It's also in the process of rolling out a grocery delivery pilot.
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