CEO of food delivery giant Zomato, Deepinder Goyal stated that the company is aggressively saving cash amid widening losses and will not make any further investments in the q-comm, or quick commerce, space, for which it had set aside $400 million.
The company’s expenses have more than doubled, with its consolidated net loss for the March quarter increasing to around Rs 360 crore, up from Rs 134 crore in the same quarter last year.
According to the letter released on Monday, the company will not be making any new investments from its $400 million corpus q-comm space, where it has previously bet on Blinkit, formerly known as Grofers.
“As far as quick commerce is concerned, we had given an upper hand bound of $400 million investment in the next two years (CY22 and CY23) in the last quarterly letter. As of now, we are on plan to stick to this outer limit,” Goyal said. “We are not planning to make any new minority investments as part of this $400M outer limit. Think of this as the max amount of losses we may need to fund in this period of time in the quick commerce business, if and when we fully get into it,” he said.
“We are seeing some stress on the availability of delivery partners in the current quarter in select large cities since the last week of April,” he continued. We believe this is a short-term phenomenon, as the post-COVID economic recovery has restored jobs in cities, and we have lost delivery partners to such jobs. Furthermore, the workforce that migrated to their hometowns during the first covid wave has yet to return to the cities for work.”
