Online food delivery giant Zomato Ltd on Wednesday announced a slew of agreements to scale up its business, while it also released quarterly earnings update for the July-September period.
The company said it is in the process of selling Fitso to Curefit (Curefit Healthcare Pvt Ltd) for $50 million, with an additional investment of $50 million in net cash in Curefit plus, which will give it a cumulative shareholding of 6.4% worth $100 million in Curefit.
“This will help us potentially explore cross-selling benefits between Zomato and Curefit, as we see food and health becoming the same side of the coin in the long term,” Zomato said in an exchange filing.
Zomato’s net loss widened to ₹429 crore for the quarter ending September as against a loss of ₹229 crore in the last year period.
Zomato said the losses went up due to investments in the growth of food delivery business, increased spending on branding and marketing for customer acquisition.
Adjusted revenue during the quarter stood at ₹1,420 crore ($189 million), a 22.6% growth quarter-over-quarter (QoQ) and 144.9% growth year-over-year (YoY).
The company said the delivery cost per order increased by ₹5 per order in the September quarter as compared to the previous quarter.
The food delivery platform said it doesn’t expect the delivery costs to go up further and feels confident about the contribution margin staying positive in the mid, as well as long term.
Further, Zomato has signed definitive documents for investing $75 million in Shiprocket for a 8% stake as part of a larger $185 million round.
Shiprocket is a B2B logistics-tech company that enables online commerce by providing seamless shipping and fulfillment services to direct-to-consumer (D2C) brands and omni-channel sellers.
The company has also inked a pact with magicpin, $50 million in Samast Technologies Pvt Ltd for a 16% stake as part of a total round size of $60 million.
Magicpin drives omni-channel growth for local retailers. It has a network of 170,000+ paying merchants in categories including fashion, food, electronics, grocery, pharma, entertainment across 50 cities in India.
Including the $100 million investment in Grofers earlier in August 2021, Zomato has now committed $275 million across 4 companies over the past six months.
The company further plans to deploy another $1 billion over the next 1-2 years, with a large chunk of it likely to go into the quick-commerce space.
On Wednesday, ahead of the results, Zomato shares were down 1.20% to close at ₹136 apiece on NSE.
Source: Mint