Last week, we delivered a billion orders on Zomato. It took us 6 years to get to this milestone and we hope it takes us much less time to deliver the next billion. The fact that 10%+ of these billion orders were delivered only in the last three months makes us confident about getting to the next billion much sooner.

The last few weeks have been pleasantly overwhelming. We thank you for the incredible response to the Zomato IPO. We also appreciate the confidence you have shown in our execution over the last few years, and are looking forward to continuing working hard at building a greatly loved, meaningfully large business in the years to come. 

We aim to be one of the best guardians of your capital/earnings in the long term. Through letters to shareholders (like this one), we will transparently address all meaningful questions around our business. 

Let’s start with the good news – the last quarter (Q1 FY22) went well. Adjusted Revenue grew by 26% quarter-over-quarter (“QoQ”) to INR 11.6 billion; year-over-year (“YoY”) growth is irrelevant (and unnaturally high) here since Q1 FY21 was severely impacted by the first wave of lockdowns in 2020.

Revenue growth was largely on the back of growth in our core food delivery business which continued to grow despite the severe COVID wave starting April. On the other hand, COVID significantly impacted the dining-out business in Q1 FY22 reversing most of the gains the industry made in Q4 FY21.

Q1 FY22 was also one of the most challenging quarters for our team. As the second COVID wave ravaged the nation, we were left scrambling to work on multiple things at the same time. At the peak of the second wave, almost 35% of our employees were battling COVID in their households. On top of it, we were executing very hard along with Feeding India to source and distribute oxygen concentrators to as many hospitals in need as possible.

In hindsight, our team battled against the odds to execute extremely well amidst this challenging environment.

Adjusted EBITDA loss was INR 1.7 billion in Q1 FY22 as compared to INR 1.2 billion in Q4 FY21. The loss for Q1 FY22 reported in our financial statements is INR 3.6 billion as compared to the Adjusted EBITDA loss of INR 1.7 billion. This is largely on account of non-cash ESOP expenses which have increased meaningfully in Q1 FY22 due to significant ESOP grants made in the quarter pursuant to creation of a new ESOP 2021 scheme. This divergence in reported profit/loss and Adjusted EBITDA will continue going forward.

Adding some more color to the business trajectory – our India food delivery business continues to remain contribution positive; although the contribution margin reduced slightly in Q1 FY22 as compared to the previous quarter on account of growth investments in addition to the costlier business environment (due to lockdowns) in which this growth was achieved. 

India dining-out revenue shrunk over the previous quarter which also led to increase in Adjusted EBITDA losses. Hyperpure losses expanded in Q1 FY22 due to investments in growth. 

India food delivery business reported the highest ever GOV, number of orders, transacting users, active restaurant partners and active delivery partners till date in any quarter in our history. 

India food delivery GOV in Q1 FY22 grew by 37% QoQ to INR 45.4 billion ($605m), from INR 33.1 billion ($442m) in Q4 FY21 (@ 1 USD = 75 INR).

Gross Order Value (“GOV”) is defined as the total monetary value of all food delivery orders placed online on our platform in India including taxes, customer delivery charges, gross of all discounts, excluding tips.

We love bad news at Zomato. Call us weird, but we get more excited than disappointed when we hear bad news. Bad news is an opportunity to improve. No business can ever be perfect, but every business can always aim to become better than yesterday.

Last year, we ranked at the bottom of a gig economy worker survey conducted by an independent third party. We acknowledged that there was a lot we needed to do and we fast tracked a number of initiatives in the pipeline to improve the work environment for our delivery partners. 

In order to track our progress on a real time basis, we put together a Delivery Partner NPS Survey in place, through which 76% of our delivery partners engage with us directly. This is statistically significant, unlike 3rd party surveys which are subjective to say the very least.

Over the last year, here are a few initiatives we made to improve the working conditions of our delivery partner network – 

  • Improved payout structure: During the course of the year, we have redesigned our payout structure for our delivery partners. We added an additional fee for long distance and increase in fuel prices (among other variables) to ensure delivery partners are fairly compensated. The subsequent increase in their earnings per order is ~15% higher than what it was about a year ago.
  • Extended cash limit: We have heavily increased (1.5x-2x, depending on delivery partner’s age and quality on platform) the existing cash limit for our delivery partners, enabling them to utilise cash collected from cash-on-delivery orders for their own spends, thereby improving the available working capital with them for their mid-week spends. This outstanding amount is adjusted against the weekly payout, saving the delivery partners time, trips, and cash-in-hand deficits.
  • Remote onboarding, and home delivery of assets: We let go of physical onboarding centres for new delivery partners. They can now undergo DIY remote onboarding, training, background verification using our Delivery Partner app, and start working without spending time visiting a physical onboarding centre. New partners also receive their assets (t-shirts and delivery bags) through home delivery in just a few hours after remote onboarding, thus ensuring they start earning much faster.
  • Better communication of insurance benefits: While we always had medical, accidental life insurance, and COVID relief programs for our delivery partners, lack of awareness kept them from making use of these benefits. We now have a dedicated section on the delivery partner app that explains all details related to insurance and healthcare benefits. We have also simplified the process of cashless settlement of claims. Since these changes, the number of successful claims have moved up dramatically (2x).
  • We value our delivery partner’s safety. We organised nationwide vaccination camps free of cost for our partners; as of today, more than 160,000 of our delivery partners have had at least one jab of COVID-19 vaccine. This number continues to increase as we speak.
  • and numerous other little but meaningful things..

We believe we pay our delivery partners fairly for the work that they put in. We are proud to create hundreds of thousands of gigs for a strata of society which otherwise didn’t have a predictable source of income. On an average, the top 20% of our delivery partners who deliver on bikes and put in more than 40 hours a week receive a payout of more than ₹27,000 per month. Perhaps, the reason why our delivery partners work with us is because they see higher earnings potential compared to other jobs/gigs available to them at the moment.

All of this has ensured a tremendous increase in the NPS scores of our delivery partners, from -10% last year to 28% in the last few months. Our work here is clearly not done and we hope to report back with much better scores over the next few quarters.

We had 310k active delivery partners in July, which is the highest ever in our lifetime. As we look ahead, we will continue to focus on making Zomato the platform of choice for all our stakeholders and consistently strive to improve the NPS for our delivery partners, restaurant partners and customers. 

Last but not the least, we also remain grateful to our shareholders and investors, who have believed in us and in our long-term view of our business. 

Stay well,

Deepinder (Founder & CEO) and Akshant (CFO).

NOTE – We will do earnings/analyst calls once a year, at the end of each fiscal, where we will share a more detailed commentary on the year gone by along with key metrics. In the meanwhile, please feel free to write to us at if you have any questions/clarifications. We will address the most frequent/pertinent ones in our future blogs and/or quarterly shareholder letters.

This letter should be read along with the full version of this quarter’s financial performance and necessary disclaimers.


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