“Energy and persistence conquer all things.” – Benjamin Franklin

Disclaimer : all numbers in this “short form” annual report are unaudited. Exact numbers might change in small deltas while we go through the audit.

If I have to define the last year for Zomato in just two words, these will be perseverance and focus. All of us at Zomato simply put our heads down to execute.

FY16 (ending March 2016), a year ago, wasn’t ideal for us despite having achieved 2x revenue growth over FY15. That’s because our cash burn was very high at an average of $4.2m a month.

Along with the burn rate, we were also in the middle of consolidating/ rationalising our international operations to make better use of our execution bandwidth moving forward. We had just come out of the layoffs in some of our international markets, and our team’s morale wasn’t in the best shape. Additionally, back then, we were very new to the transactions space (online food ordering) and there was a lot to learn in order to stay ahead of competition.

We believe we executed reasonably well in the last year, in spite of the hard challenges in front of us. There’s still a lot to learn. Our March 2017 revenue is $5m, helping us exit the last financial year at a $60m/year revenue run rate. We achieved $49m in revenue in FY17, a growth of ~80% over FY16.

Along with a growth in revenue, we also reduced our annual operating burn from $64m in FY ‘16 to $12m in FY’17 ($75m losses reported last year included a significant amount of non-operating burn i.e. non-cash items – depreciation, amortization and non cash provisions).

Right now, the average monthly cash burn for the period of December 2016 – March 2017 is a little less than $250k globally, down from $4.2m last March; and we’re well on our way to hit profitability.

Meanwhile, we beefed up our focus on product, engineering and traffic growth, helping our overall traffic and engagement numbers immensely. Here’s how our March 2017 traffic and engagement numbers stack up against March 2016.

All this time, while we were focused on reducing burn, and ramping up revenue, we didn’t compromise or cut down on any growth engines. In fact, the last 12 months saw the most amount of innovation coming out of Zomato. Here are a few things which happened in the last year –

Re-designing our ads model

In mid 2016, we redesigned our ad serving product to drive more value to our users as well as merchants. For starters, we stopped accepting advertising from low rated restaurants, so that our users only see the best that’s out there. The new product provided smarter targeting, simpler interface and greater visibility to our well rated advertisers. We rolled this out globally by September 2016 and helped our merchants realise a ~3x increase in value from advertising on Zomato. Our ad sales revenue grew to ~$38m in FY17.

We also further enhanced the efficacy of our sales team, which led to over 83% growth in productivity (revenue/headcount) in our ads business.

Scaling up food ordering (delivery); introducing Zomato Infrastructure Services

Our food ordering team worked simultaneously on multiple fronts – user onboarding, experience, and retention along with restaurateur experience and real time payment settlements. All these initiatives helped in further enhancing our efficiency and helped in hitting 2.1 million monthly order volume in March, while keeping our unit economics positive.

Read more about our food ordering unit economics here.

Our customer delight (support) team didn’t shy away from taking a non-orthodox approach when it came to transform hungry users to happy users, and this reflected in our average order ratings and user cohorts. Our user cohorts look quite like a ‘smile’ – which is the holy grail of user cohorts. User retention and increasing frequency is so good that even if we don’t acquire any new users in April 2017, we will still grow 8% over our March volume.

Our food ordering revenue grew to ~$9m in FY’17, 8x of FY16. We are now present in 13 cities in India, and 3 cities in UAE. Middle East is very high on adoption for Zomato, and we are preparing for launching food ordering in Beirut, the Paris of Middle East.

The above wouldn’t have been possible without the cooperation of our restaurateur network. Our team worked closely with our merchants and resolved the recurring issues on ground, resulting in very low order rejections, more timely deliveries and, consequently, higher order ratings.

We also launched our first cloud kitchen in Delhi NCR which can potentially give a huge boost to our online food ordering business. You can read more about that here.

Introducing Table Reservations

On the back of our increased user engagement levels, we launched Table reservations product in July 2016, and became the market leaders in India and UAE within a month of launch. Currently we have the table reservation option across 24,000 restaurants in 12 cities. In the month of March, we seated 600k guests via our table reservations product.

Read how we grew in our table reservations business in our blog post – “The real value of discount-based customer acquisition strategy”.

Launching Zomato Gold

We also launched a premium membership programme, Zomato Gold, in Lisbon and Dubai in March 2017. The willingness of restaurants to get on board, and the whopping response from users assures us we are on the right track, and see a long, fulfilling journey ahead.

Read the blog post for launch of Zomato Gold in Dubai and Lisbon.

Beta-testing Zomato Base

Our Point of Sale product is finally starting to take shape, and is undergoing paid beta trials at over ~200 restaurants of various types and sizes. The upcoming year should definitely see increased adoption of Zomato Base by restaurants across India, UAE and beyond.

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Over the last year, the composition of our senior leadership team has evolved for the better, and we have been able to successfully integrate some new people into key roles within the organisation. For example, Mukund Kulashekaran is leading our food ordering business, Gaurav Gupta is leading our Table Reservations business. Samir Kuckreja is leading Zomato Base. We also very recently welcomed our new President and COO, Deepak Gulati (ex-CEO Tata Docomo) to Zomato.

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Overall, we are in a good place now. The team is hungry for moonshots, and is keeping its head down, learning and executing well. Of course, there’s always a lot more ahead of us and we all truly believe that we are only 1% done.

Stay tuned for an upcoming blog post by Deepinder – “Learnings from 2016”. We realised Deepinder is never going to get around to writing this, so please don’t stay tuned!

Important note : this is all the data we can and will share for now. Info Edge is a significant public shareholder, therefore we will need to refrain from sharing any information outside the public domain (i.e. our blog).