- Food delivery startup Swiggy reported a six-fold increase in losses for the financial year ended March 2019 (FY19) due to increased spending that increased fourfold in the same year.
Food delivery startup Swiggy reported a six-fold increase in losses for the financial year ended March 2019 (FY19) due to increased spending that increased fourfold in the same year at a time when the five-year-old startup was expanding rapidly across the country to keep up with intense completion in the food supply market.
Swiggy posted a net loss of some 2,367 crores in FY19, a significant increase from some 385 crore losses reported in FY18 a year ago. Nevertheless, the startup increased its revenue by three times in FY19, which stood at 1,128.3 crores, compared to revenues posted a year ago from some 0,417 crores.
“FY 18-19 was another successful year of execution for Swiggy as we continued to grow our dominant market leadership position. We saw a 4.2x raise in order volumes and a 2.8x increase in operating revenue against a higher baseline, underlining our ability to grow sustainably over the long term. We made several strategic bets and acquisitions in innovation, product and supply creatures throughout the year.
The food delivery company derived most of its revenue from its FY19 marketplace activities, which stood at approximately 1,074.1 crores, while Swiggy’s private brands operating on a delivery-only model produced revenue of approximately 67.5 crores in FY19 or just 6 percent of the overall revenue of the startup.
Swiggy’s FY19 spending rose to approximately 3,659.1 crores, a sharp increase compared to the crore spending announced a year ago. Most of the startup’s expenses were incurred in operating costs which stood at 1,681.2 crores in FY19, out of which the cost of food distribution alone stood at around 1,594 crores in the same year.
Due to undelivered orders and canceled orders in FY19, which was recorded as a loss in the same year, the startup also incurred a cost of approximately 113.4 crores. The amount also includes “cost of orders canceled by the customers after the orders were picked up by the delivery partners… it also includes cash losses incurred due to the cash removal of the delivery partners” Swiggy said in a note in its financial statements. Currently, Swiggy clocks nearly 1.4 million food orders daily throughout India, compared to about 700,000 orders a year ago.
The startup has a presence on its website in over 500 towns and cities, 140,000 restaurants and 2.1 lakh active supply partners. It is also planning to expand in the next year to another 100 locations.
Swiggy’s closest competitor Zomato also claims to be present in more than 500 Indian cities with both startups betting heavily on cloud kitchens or providing only kitchens to expand their presence. Swiggy’s’ Swiggy Access ‘ cloud kitchen company is already handling about 1.5 million orders a month from over 500 cloud kitchens in 14 cities.
Apart from this, media reports suggest that Uber co-founder Travis Kalanick is expected to launch a new cloud kitchen startup, which will mainly focus on India.
