Here#39;s how Zomato makes money

Zomato, the online food delivery and restaurant-discovery platform, is set to raise $ 1.2 billion through the share sale.

Zomato, the online food delivery and restaurant-discovery platform, is set to raise $ 1.2 billion through the share sale.

Online restaurant discovery and food ordering firm Zomato is all set to raise $ 1.2 billion through its initial public offering (IPO), paving the way for one of the most keenly awaited share sales in recent history.

Also read: SEBI clears Zomato’s IPO application

According to sources, the Securities and Exchange Board of India (SEBI) is likely to announce the approval of the IPO today.

Here’s an explainer on how Zomato makes money.


During financial year 2020, Zomato was reported to have received over 403 million orders with a gross order value of Rs 112,209 million — up from Rs 30.6 million in 2019 and Rs 13,341.4 million in 2018.

The total income of the company stood at Rs 27,427 million during the period under review — up against Rs 4,870.48 million in 2018.

Within the food delivery business, the three stakeholders are customers, delivery partners and restaurant partners.

Customers: On an average, 10.7 million customers ordered food every month on Zomato in India in FY 2020, with an average monthly frequency of over three times.
Delivery partners: Zomato had 161,637 active delivery partners during December 2020.

Restaurant partners: Restaurants are the backbone of this business. On an average, in fiscal 2020, Zomato had 131,233 active food delivery restaurants every month.

Where does the money come from?

Zomato charges commissions from restaurant partners for listing on its app and delivering food.

Delivery charges are paid by users, which are passed down to delivery partners.

Customers also pay for packaging charges on select orders, which again are passed through to restaurant partners.

Tips paid by customers (if any) are also passed to delivery partners.

Zomato also earns advertisement revenue.


Customers use Zomato’s dining-out offerings to search and discover restaurants, read and write customer-generated reviews, book tables and make payments while dining out at restaurants.

As of December 31, 2020, Zomato had 3,50,174 active restaurant listings. It also had 157 million units of customer-generated content on its platform. In terms of table bookings, 12.2 million covers were booked through its platform in fiscal 2020.

It monetises the dining-out offering through advertisement sales. Restaurant partners pay Zomato for enhanced visibility on the platform.

In fiscal 2020, 8,064 restaurant partners paid for Zomato’s advertising sales products in India.

Currently, Zomato does not monetise table reservations or dining-out payments.


Launched in 2019, under Hyperpure, Zomato sources ingredients and supplies directly from farmers, mills, producers and processors to supply to its restaurant partners. These restaurant partners get a ‘Hyperpure Inside’ tag on their Zomato page, which is intended to provide customers with an assurance of the quality of ingredients used at the restaurants.

In December 2020, over 6,000 restaurant partners across six cities in India paid Zomato to source these products.


Zomato has a paid membership programne, which unlocks flat percentage discounts for customers at select restaurant partners across both food delivery and dining-out offerings.

The Pro Restaurant partners choose and fund the percentage discount available to Pro Members at their restaurants. As of December 31, 2020, Zomato had 1.4 million Pro Members and over 25,350 Pro Restaurant Partners in India.