Foodtech company Zomato, which has taken a massive hit on business during the COVID-19 crisis, said it is expecting to make a complete recovery of monthly revenues in the next 3-6 months. The company also said it is set to cut its monthly burn rate to under $1 million in July compared to $12 million in March this year.

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The statement comes as part of Zomato’s annual report where it also highlighted its fiscal performance in FY20, during which it more than doubled its revenues to $394 million, a 105 percent jump from the previous year.

The company saw costs grow 47 percent in the fiscal, with EBITDA losses growing marginally to $293 million compared to $277 million in FY19.

While FY20 was a strong fiscal for the company, where it also saw its food delivery GMV more than double to $1.4 billion from $718 million in FY19, Zomato said the COVID-19 crisis has already set it back by a year.

“While COVID-19 has impacted the size of our business, it has accelerated our journey to profitability. In terms of the size of the business, COVID-19 has set us back by a year or so – but a year is only a small blip when you are building a company for the next 100 years,” CEO Deepinder Goyal said in the report.

In the June quarter, the food-tech company saw losses of $12 million on revenues of $41 million.

“ Right after the rise of COVID-19 cases in India towards the end of March, our food delivery GMV hit its lowest point in two years – GMV was 80 percent down in the last week of March 2020, compared to our peak pre-COVID-19 week (in mid-February),” Goyal said.

Zomato said its dining-out business segment was the hardest hit as restaurants remained shut for dining-out, leading to “almost negligible revenue” across advertising and Zomato Pro (earlier Zomato Gold).

However, the company is starting to see recovery, stating that the food delivery GMV has recovered to 60 percent of pre-COVID levels.

Goyal said the crisis positively impacted the “health of the business”.

“In July 2020, we estimate our monthly burn rate to land under $1 million, while our revenue should land at ~60 percent of pre-COVID peaks ($23 million per month). We expect to make a complete recovery over the next 3-6 months while continuing to maintain tight control on costs/profitability,” he said.

Zomato had laid off 520 employees, or about 13 percent of its workforce in May during the COVID crisis, and had also initiated pay cuts across levels. The company said on Friday that it is reinstating the salaries back to original levels.

“75 percent of our employees volunteered for partial salary cuts resulting in a total reduction of 14 percent in our payroll costs. 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,” Goyal said.

First Published:Jul 10, 2020 7:42 PM IST