India Startup: Zomato Becomes India's First E-Commerce to Break Even
One of India's largest startup, Zomato, announced that it has broken even in India as well as six other big markets, including the UAE, Lebanon, Qatar, the Philippines, and Indonesia. The restaurant finder and e-commerce app company also stated that it will become profitable in a few months.
According to The Economic Times of India Times, the achievement is due to growth in core advertisement business that resulted in increase in revenues. Other factor that significantly supported the startup's growth is tighter financial controls. The financial controls include keeping tabs on every little spending the company do, also keeping an effective team and not hiring more people.
Zomato has successfully expand its service to 23 countries, including the U.S, Canada, and Australia. This makes the startup one of very few Indian startups to succeed in foreign markets, while other Indian e-commerce startups are struggling to find investors.
According to Forbes, Zomato is now valued at over $1 billion, with a total of $225 million supports from some big names including Sequoia Capital, Singapore's Temasek Holdings, and India's Info Edge. And when the startup become profitable by mid-2016, Zomato will be the first Indian e-commerce unicorn to become profitable.
Zomato Founder and CEO Deepinder Goyal stated that by then, they would not need funding anymore to keep on going. "The fundamental model of our business is that in mature markets we should make profits and they shouldn't need any more outside money to grow," Goyal revealed the company's success. Our unwavering focus is making money, the bulk of our revenues comes from advertising, and we have doubled our ad revenues in the last four months while keeping costs stable," he added.
Goyal also revealed that Zomato expects revenue both from India and foreign markets. India advertisements contribute to 35 percent of the company's revenues, but Goyal considered that overseas markets have a bigger potential. He revealed that all foreign markets have a combined size 14 times bigger that that of India.
MoneyControl reported that Zomato is planning to start another round of funding in April. This time, the company will raise $200 million to expand its food delivery service. Chinese tech giants such as Baidu and Alibaba Group has been reported to have interests and discussions to invest in Zomato.
Zomato was founded in 2008, but the food delivery business had just started last year. If indeed the company succeeded in being profitable, Zomato will be the first Indian e-commerce unicorn to achieve that amid difficulties in securing investors let alone breaking even in several markets, including foreign markets.