Swiggy's losses rise six-fold to ₹2,367 crore in FY19

Food delivery startup Swiggy has posted a six-fold increase in losses for the financial year-ended March 2019 (FY19), on account of heightened expenses which went up by four-fold during the same year at a time when the five-year-old startup has been expanding rapidly across the country to keep up with intense completion in the food delivery segment.

Swiggy posted a net loss of ₹2,367 crore in FY19, which is a substantial increase compared to ₹385 crore losses posted a year ago in FY18. The startup however grew its revenue by three-fold in FY19 which stood at ₹1,128.3 crore, compared to revenues of ₹417 crore reported a year ago.

"FY 18-19 has been another strong year of execution for Swiggy as we continued to grow our dominant market leadership position. We saw a 4.2x increase in order volumes and a 2.8x increase in operating revenue despite a higher baseline, underscoring our ability to grow in a sustainable manner over the long-term. During the year, we made many strategic bets and investments in technology, brand and supply creation that have been the drivers of category growth in Indian food delivery and will bear fruit in Swiggy’s vision," said a Swiggy spokesperson in response to Mint's queries.

The food delivery startup generated a majority of its revenue from its marketplace operations in FY19 which stood at ₹1,074.1 crore, while Swiggy’s private brands which operate on a delivery-only model generated revenues of ₹67.5 crore in FY19 or just 6% of the startup’s overall revenues.

Swiggy’s expenses for FY19 increased to ₹3,659.1 crore, which is a sharp increase compared to ₹841.4 crore expenses reported a year ago. A majority of the startup’s expenses were incurred in operational costs which stood at ₹1,681.2 crore in FY19, out of which food delivery costs alone stood at ₹1,594 crore in the same year.

The startup also incurred a cost of ₹113.4 crore on account of undelivered orders and canceled orders in FY19 which was categorized as a loss in the same year. The amount also includes “cost of orders cancelled by the customers after the orders have been picked up by the delivery partners…it also includes cash loss incurred due to absconding of the delivery partners with cash” Swiggy said in a note in its financial statements.

Currently, Swiggy clocks nearly 1.4 million food orders daily across India, compared with about 700,000 orders per day a year ago. The startup has a presence in over 500 cities and towns, 140,000 restaurants on its platform and 2.1 lakh active delivery partners. It also plans to expand into another 100 cities in the next year.

Swiggy’s closest competitor Zomato also claims to be present in over 500 cities in India with both startups betting heavily on cloud kitchens or delivery only kitchens to grow its presence. Swiggy’s cloud kitchen business named ‘Swiggy Access’ is already processing around 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.