Zomato cuts monthly burn to $20m, says top investor

Zomato’s monthly burn has come down to $20 million (Rs 143 crore) in October from about $45 million (Rs 322 crore) in March. This was revealed by one of the online food delivery platform’s largest shareholders Info Edge after announcing its September quarter earnings.

The reduction in monthly spends for Zomato was recorded even though it expanded to about 500 cities, widening its reach in the country.

Info Edge, which holds an over 26% stake in Zomato, did not give details on order volumes of Zomato but told analysts the company was able to reduce its burn owing to certain changes while scaling up operations.

“They are cutting discounts, cutting marketing at the bottom end — on small orders…cutting abuse on people breaking orders in two or three to get more discounts. Just by doing that, they have been able to cut down the burn,” said Sanjeev Bikhchandani, co-founder of Info Edge. He added Zomato’s agenda remains to cut monthly burn and grow order volumes.

Zomato is fighting against Bengaluru-based rival Swiggy, which has been spending $40-50 million per month to corner market share. During the analyst call, Info Edge confirmed Chinese internet giant Tencent’s investment in PolicyBazaar, which was first reported by TOI in July. Info Edge did not comment on the details of the secondary transaction.

On Amazon’s entry into food delivery, Bikhchandani said Zomato was well-positioned to protect its position in the market.

Info Edge reported a revenue of Rs 316 crore for the quarter under review compared to Rs 265 crore in the same period of the previous year.

Source:- https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/zomato-cuts-monthly-burn-to-20m-says-top-investor/72032027