Swiggy, a prominent player in the food and grocery delivery industry, witnessed a significant jump in its loss according to the annual report of Prosus, one of its major investors. In 2022, Swiggy’s loss soared to $545 million, marking a notable increase from the $300 million loss incurred in 2021.
“Our share of Swiggy’s trading loss increased to $180 Mn (FY22: $100 Mn), driven by investment in Instamart, which peaked in the year,” Prosus said.
Prosus holds a significant 33% ownership in Swiggy and incurred a loss of approximately $180 million from its stake in the foodtech platform. Consequently, Swiggy recorded a total loss of $545 million for the year.
“Our share of Swiggy’s revenue grew 40% (73%) to $297 Mn, reflecting higher average order values and increased revenue from delivery fees and advertising sales,” Prosus said in its report.
According to Prosus’ data, Swiggy experienced substantial growth in overall revenue, increasing to approximately $900 million during the year, compared to $600 million in the previous year.
According to Prosus, the restaurant food-delivery business experienced a substantial GMV growth of 26% in 2022. In comparison, Instamart witnessed a remarkable surge in GMV, with a staggering growth rate of 459%.
“In the last two reporting periods, Swiggy has concentrated on reactivating users, increasing monthly frequency and improving user conversion. The benefits are reflected in its results for FY23, with over 272 000 enabled restaurants on its platform, 155% of pre-pandemic levels, with GMV at $2.6 Bn,” Prosus said.
In its report, Prosus highlighted that Swiggy, as confirmed by its CEO, significantly intensified its focus on enhancing the profitability of its core restaurant food-delivery business. Notably, the CEO recently announced that Swiggy had successfully attained profitability in March 2023, following a dedicated investment phase.
Swiggy made a statement in May, asserting that it had achieved profitability in its food delivery business as of March 2023.
Read More: Swiggy’s strategic initiatives pay off as food delivery business turns profitable
Meanwhile, Zomato, Swiggy’s competitor, announced that its business, excluding the Blinkit quick commerce vertical, achieved positive adjusted EBITDA in Q4 FY23. Zomato’s net loss for the March quarter of 2023 decreased by 48% year-on-year (YoY), amounting to INR 187.6 Cr.
In Q4 FY23, Zomato witnessed a rise in adjusted revenue for its food delivery business, reaching INR 1,530 Cr, compared to INR 1,284 Cr in the same quarter of the previous year. On the other hand, Blinkit experienced a significant surge in revenue, with a growth of nearly 21% to INR 363 Cr in Q4 FY23, up from INR 301 Cr in the preceding quarter.
In the midst of a macroeconomic slowdown, a funding winter, and valuation markdowns by investors, startups are prioritizing profitability. To achieve this, they are adopting cost-cutting measures, including employee layoffs, as part of their strategy.
Earlier this year, Swiggy took the decision to terminate the employment of 380 employees. Additionally, the company discontinued certain business verticals, namely Handpicked and the private label The Bowl Company in Delhi-NCR, as they were not able to establish a suitable product-market fit.
