Zomato Media Pvt. Ltd is working on two new models - Zomato Red and Zomato Infrastructure Services to boost revenue and profitability as a part of its plan and profitability as part of its plan to expand its company.
Zomato generated net revenue of $4 milllion in October,is expected to reach annual sales of $50-60 million by March 2017, largely on the lines of a strong online delivery business and table reservation service segment.
Co-Founder and CEO Deepinder Goyal said in an interview that the new initiatives will be rolled out February and June 2017. He expects that Zomato will conveniently double its revenues in the next three years.
The company plans to build kitchen spaces where there is inadequate supply of food outlets and restaurants, and will allow known brands to exclusively prepare and deliver for Zomato through these kitchens. The company is investing right from the kitchens to the last mile of the delivery step.Its going to ask for commission from restaurants as high as 35% on every order delivered through kitchens.
The initiative will be initially tested in Gurgaon, where Zomato has taken up about 8,200 sq. ft with the capacity to house as many as eight kitchens. And the next step after this seems to be Tier-II and Tier-III cities, where Indian consumers still don't have so many big brands to look at as food options. Slowly and steadily, the company will invest about $2-3 million towards the initiative and expects a recovery period of six months before the investment starts generating cash for the company.
The second initiative called Zomato Red will also roll out allowing consumers to buy a yearly/ semi-annual subscription to get exclusive offers like happy hours for drinks and pubs and restaurants This feature will first roll out in Dubai and Libson (Portugal) starting from January and will be introduced in India by March 2017.
Zomato Red will help the company to strengthen its brand and build loyalty programme that will increase repeat orders especially at a time when its facing stiff competition from Bangaluru based 'Swiggy' in the food ordering space.
Zomato is currently looking at raising fresh capital in order to support growth in existing and the new business with the with the focus to expand customer base. Founded by Deepinder Goyal and Pankaj Chaddh, Zomato is backed by Info Edge, Singapore based Tamsek Holdings Pte, Sequoia and Vy Capital. The company was valued at a billion dollars in September when it raised $60 million fresh capital, largely from Temasek.
The company attracted a lot of attention during the last ten months due to its high burn rate and as losses mounted to Rs. 492 crore (loss before tax)for the year end March 2015. However, Goyal claims that the company has now brought its cash burn down below a million dollars. It key focus will be markets in India, Middle East, Australia and New Zealand among others for sometime now.
BW Reporters
Soumya is a young writer and journalist, with bachelors in Multimedia and Mass Communication. She is an alumini of the Asian College of Journalism, and finds politics and sustainability intriguing beats to work with.
