Online restaurant listing and discovery startup Zomato reported deeper losses for the financial year ending 2016, despite doubling of revenues.
Pre-tax loss at Zomato Media Pvt Ltd widened to Rs. 492.27 crore on revenue of Rs. 184.96 crore for the year 2015-16, Info Edge, which owns 50 per cent in the firm, said in a stock exchange filing.
This compared with a pre-tax loss of Rs. 136 crore on revenue of Rs. 96.73 crore in 2014-15. Losses at Zomato also impacted Info Edge’s results. Info Edge, which also runs recruitment portal Naukri.com and real estate portal 99acres.com among others, posted a consolidated net loss of Rs. 251.79 crore for 2015-16, when compared with a net profit of Rs. 24.1 crore in the comparable period last year. Zomato’s losses had some analysts raise questions around the firm’s cash burn in Info Edge’s post earnings call. “Zomato had $35 million cash and the majority of restructuring and cost-cutting mainly involving overseas operations is over,” Sanjeev Bikhchandani, Founder and Executive Vice-Chairman of Info Edge said in an investor call, post earnings.
Zomato, which is one of India’s Unicorn (private firm’s valued over a $1 billion), had taken non-cash charge of Rs. 104 crore due to its overseas acquisition of Urbanspoon.
Mr. Bikhchandani also noted that the firm’s cash burn was declining and it had come down to $2 million in May and the trend was likely to continue. “There won’t be a situation where Zomato runs out of cash,” he said, adding the firm was on course to breaking even. Zomato has gone through rough times in the past one year. The firm had laid off about 10 per cent of its workforce in October 2015, majority of them in the U.S. It also rolled back online ordering in four cities in January.
Earlier this month, HSBC’s brokerage arm, HSBC Securities and Capital Markets, had also slashed the valuation of Zomato by half to $500 million.
