Prosus‘ soon-to-be CEO, Fabricio Bloisi, sees potential for collaboration and synergy between portfolio companies Swiggy and Germany’s Delivery Hero.
Prosus holds the largest stake in Swiggy, owning 32% of the startup. Additionally, it has played a significant role as an investor for Delivery Hero, a company that went public in Germany back in 2017.
“Prosus has been increasingly involved with Delivery Hero in recent months, and it’s been more engaged in supporting Swiggy, as well, obviously. With my appointment, we anticipate greater opportunities for collaboration between our businesses and the sharing of best practices,” Bloisi informed analysts during a conference call on May 17 following the announcement of his new role.
Bloisi is set to become an executive director on the Naspers board starting July 1, and will subsequently join the Prosus board following the AGM in August 2024.
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It’s worth noting that Bloisi presently serves as the CEO of iFood, a prominent food delivery startup in Brazil. Although he didn’t disclose detailed plans for collaboration between Swiggy and Delivery Hero, he highlighted that Swiggy’s expertise in Instamart and quick commerce in India would benefit iFood.
“In India, we collaborate closely with Harsha [Sriharsha Majety, cofounder of Swiggy] and the Swiggy team. Our interactions with them have been highly informative, particularly in the realm of iFood. For instance, their success with dark stores in the grocery sector is something we’re closely studying,” he shared with analysts, drawing parallels between his experiences in Brazil and the potential contributions to Prosus’ ventures in India.
Although the potential partnership between Delhivery Hero and Swiggy remains in the realm of speculation, it raises the question of whether Swiggy intends to venture into international markets through such a collaboration. However, there have been no signals thus far indicating that the Bengaluru-based unicorn is considering an expansion abroad.
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Considering Swiggy’s aims to reduce expenses, achieve profitability, and its recent filing of pre-IPO papers in India, any potential collaboration with Delivery Hero will be under close scrutiny.
Financial Performance of Swiggy
For context, in the fiscal year 2023, Swiggy reported a net loss of INR 4,179 crore, with operating revenue reaching INR 8,246 crore. According to reports, during the first nine months of fiscal year 2024 (from April 2023 to December 2023), the company recorded a loss of approximately $207 million (approximately INR 1,650 crore).
Given Zomato‘s less-than-impressive track record with global ventures, it’s intriguing to observe how Swiggy harnesses the potential synergies within Prosus’ portfolio. Delivery Hero, with its presence in 70 countries spanning Asia, Europe, MENA, and the Americas, offers a significant scope for exploration.
It’s worth mentioning that in 2019, Delivery Hero acquired Zomato’s UAE business, a direct competitor to Swiggy. Additionally, Delivery Hero invested $50 million in Zomato’s international operations, which is now a publicly listed food delivery powerhouse. Zomato, in its bid for global expansion, acquired several entities including Urbanspoon, Gastronauci, Cibando, MenuMania, and Lunchtime.
However, leading up to its initial public offering and shortly thereafter, the company opted to cease international operations in several regions, aiming to streamline its business operations.
Zomato, which made its debut on the stock market in 2021, reported its first-ever profit of INR 351 crore for the entire fiscal year of FY24.
The Gurugram-headquartered food delivery and quick commerce behemoth discontinued operations across nearly all international markets, such as the United States, United Kingdom, Singapore, and most recently Lebanon. Earlier this year, it also wound up its subsidiaries in Vietnam and the Czech Republic.
It remains to be seen whether Swiggy will reap any advantages from potential synergies with international players like Delivery Hero, particularly given Zomato’s previous unsuccessful experiences in similar endeavors.
In addition to discussing Swiggy, Bloisi announced that he would be visiting India in the coming weeks to further explore Prosus’s portfolio, which includes Meesho and PayU. “Therefore, you can anticipate that I will spend more time in India learning a great deal and considering how we can leverage our global structure to strengthen our position in India.
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