Bengaluru: India’s largest online food ordering and delivery service, Swiggy, clocked a more than three-fold rise in revenue in 2017-18 even as losses rose sharply. The company, which is currently in talks to raise funds, posted a revenue of ₹ 468 crore in the year ended 31 March, compared with ₹ 146 crore in the previous year, showed regulatory documents from business intelligence platform Tofler. In the same period, losses nearly doubled to ₹ 397 crore, from ₹ 205 crore in the previous year, as the startup spent heavily to keep its lead over rivals such as Zomato and Uber Eats.
In its latest filings to the ministry of corporate affairs, Swiggy said it was taking steps to cut costs. It did not elaborate.
“The directors of the company are taking all effective steps to increase the revenue and reduce the operating cost of the company. Your directors are confident that the company will grow and prosper in the coming years," Swiggy said in its filings.
Earlier this year, Mint reported revenue at Zomato Media Pvt. Ltd doubled to ₹ 399 crore in the year ended 31 March 2017, even as the restaurant discovery and online food ordering startup cut its losses. Zomato, which is present in 23 countries, earns revenue from advertising and food delivery.
Bengaluru-based Swiggy leads the online food delivery market in India with a 35-38% market share, followed by Zomato at 25-30%, according to a recent report from RedSeer Consulting, an internet-focussed consulting firm in India. Caught in a fierce battle for market share, both Swiggy and Zomato are spending heavily to fund discounting and low-cost deliveries.
Both need to keep raising huge amounts of capital to pay for this battle.
In 2017-18, Swiggy focused on delivering “exceptional value" to users, while investing significantly for the future and improving operational efficiencies, a Swiggy spokeswoman said.
“This has resulted in the operating revenue increase (232% increase) outpacing the cost increase, further strengthening our leadership position as India’s largest food ordering and delivery platform. We will continue to double down on this growth as we expand to more cities and experiment with innovative ways to bring more convenience to the lives of consumers," said the spokeswoman.
In an interview earlier this year, Swiggy co-founder and CEO Sriharsha Majety had said growth, and not profitability, remains the priority for the startup.
“We are being fairly measured about our own dependence on these things (discounting) to drive business and it’s super important to keep building a real long-term, sustainable business. We will react in ways to be competitive, but it’s not our focus area to figure out ways to spend on discounts. For us, it is well under control and probably a few quarters of such behaviour is to be expected because of new players who are trying to win market share suddenly," said Majety in the interview in August.
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Mint had reported in September that Swiggy is in talks to raise as much as $700 million and plans to use it to enter new businesses and areas, especially in the hyperlocal delivery space. Last week, several media outlets reported that Swiggy was in talks to raise at least $600 million in primary capital from existing investor, Naspers. Rival Zomato too is currently in talks to raise money from new investors such as Japan’s SoftBank Group Corp., Mint first reported on 3 August.
Earlier this year, Swiggy raised $210 million, catapulting it into a select club of startups with a valuation of $1 billion or more. It has raised about $465 million till date, and is easily the most well-funded food-tech startup in India.
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