Swiggy’s food delivery business turned profitable in March 2023 (quarter 4 of the financial year 2023) after considering corporate costs and excluding employee stock options (ESOP). Its CEO said in a blog post.
Sriharsh Majety wrote about Swiggy’s financials days after two US investors valued the company. According to a filing with the US Securities and Exchange Commission, a fund managed by asset management firm Barron Capital Group has cut Swiggy’s valuation by 34 per cent to $7.1 million as of December 2022.
According to a filing, Invesco, which led Swiggy’s previous funding round, has cut the valuation by 33 per cent from $ 8.2 billion to about $ 5.5 billion.
Swiggy’s data on its financial performance comes a day before its main rival Zomato announced its quarter 4 of the financial year 2023.
What Swiggy’s Co-founder said
The company co-founder Majety said that as of March 2023, Swiggy’s food delivery business has become profitable. This is after calculating all corporate costs but employee stock option costs.
Majety further said that this is great for global food delivery, not only for them. This is because Swiggy, today, has become one of the few global food delivery platforms that have achieved profitability in just years since its start. He further said that the company reached the milestone and, at the same time, brought benefits to its delivery partners and customers.
Majety further said their main value to put the customer first was consistently rewarded with consumer love and the industry’s best NPS scores. They continue to progress further in achieving customer benefits and strong traction in Tier 2 and 3 markets.
He said his teams are working well with restaurants to improve their experience with Swiggy. As a result, Swiggy’s restaurant’s Net Promoter Score has improved by over 100 % over the past eight quarters. During its tenure, Swiggy’s monthly cash burn has reportedly dropped from around $45-50 million to $20 million per month.
The peak was in 2021. Majety said they strongly believe it is still early in India’s food consumption and delivery journey. They are positive about growth potential over the next two decades. They shall continue with responsible and measured interventions to increase the food supply.
Majety said that Swiggy’s investments in instant delivery service Instamart are paying off.
He said that Instamart is 1 of the leading players in worldwide e-commerce. Also, they have made great progress in the profitability of their business. They are on track to achieve contribution neutrality for this three-year-old business in the next few weeks.
Swiggy food delivery is turning profitable even as the Bengaluru-based on-demand delivery platform has undergone layoffs since earlier this year. It is preparing for a public listing. This is reflected in the form of layoffs, the closing of some of the company’s business verticals, and additions to its board of directors.
In January of this present year, the firm laid off 380 employees. This is from its 6,000-strong workforce. Swiggy has also shut down its meat delivery vertical. This is because it was not successful in achieving a proper product-market fit.
In the meantime, the revenue of Zomato in quarter 3 went up 75 per cent to rupees 1,948.2 crores. It was rupees 1,112 crores in the same period of the previous financial year. The slackening was because of a macro slowdown in the food delivery market. This was coupled with a boom in dining out and a surge in travel.