Mint Explainer | What Swiggy and Zomato’s spending patterns reveal about their future

While Swiggy used its funds to expand dark stores, repay debt, and support daily operations, Eternal adopted a more conservative approach, parking most of its capital in safe assets such as government securities and fixed deposits.

Mint examines their divergent plans to understand what lies ahead for the country's food-delivery ecosystem.

How much did the two last raise?

In November 2024, Swiggy and Eternal raised substantial funds. Swiggy launched its initial public offering (IPO), raising a total of ₹11,327 crore. Of which, only ₹4,359 crore was fresh capital that the company earmarked for its business. The rest went to shareholders who sold their stakes.

Eternal raised ₹8,436 crore through a qualified institutional placement (QIP), which allows listed companies to raise funds privately from large institutional investors, like mutual funds and insurance firms.

How much of these funds have they utilized so far?

Despite raising half the funds of Eternal, Swiggy has utilized nearly twice the proportion. It has utilized ₹2,852 crore, or approximately 62%, of the ₹4,359 crore raised through the IPO, covering debt repayment, dark-store expansion for its quick-commerce arm Instamart, and brand marketing.

It has ₹1,647 crore in fixed deposits and short-term instruments, and plans to raise ₹10,000 crore via QIP in the December quarter.

Eternal has spent ₹2,946 crore, or approximately 35%, of its QIP funds by the September quarter. It has parked remaining ₹5,491 crore in bank deposits and government securities, accumulating interest as the company focuses on profitability and gradual growth, prioritizing dark-store expansion, technology upgrades, and marketing.

Where have they spent their money?

Swiggy and Eternal have both invested in key areas, including dark-store expansion, technology, and marketing, to expand reach. However, their spending patterns reveal contrasting strategies.

The largest portion of Eternal's ₹2,946-crore spending of its QIP funds— ₹1,039 crore—was allocated to dark-store expansion, followed by general corporate expenses at ₹942 crore. It also spent ₹636 crore on marketing and customer acquisition, as well as ₹329 crore on technology development.

Eternal’s measured approach reflects its caution, as it focuses on strengthening Blinkit’s operational network while keeping ₹5,491 crore in bank deposits and government securities for future use.

Swiggy, on the other hand, has adopted a much more aggressive spending strategy. The bulk of its expenditures went towards marketing and brand building, totalling ₹568 crore, followed by dark-store expansion at ₹546 crore, and general corporate purposes at ₹1,137 crore. Additionally, it invested ₹299 crore in technology and infrastructure and fully repaid ₹165 crore related to its Scootsy acquisition.

How long can these funds last?

Eternal’s slower spending gives it a longer financial runway. Having used only a third of its QIP funds so far, the company has enough liquidity to fund operations for almost two more years at this rate.

However, Swiggy is burning through its IPO proceeds at a much faster rate. At its present pace, the remaining funds could last no more than two to three quarters, requiring it to raise ₹10,000 crore via QIP.

What do these expenditures say about their strategies?

Swiggy’s higher burn rate underscores its push to capture market share, said Satish Meena, founder of market research firm Datum Intelligence. “The (spending) rate is different because Swiggy is playing catch-up."

“Swiggy is more aggressive in terms of expansion because it is in a position to gain market share," he said. “It wants more market share now. So, it is giving more discounts, its burn is high, and it has even started reducing delivery and handling fees."

In contrast, competitors such as Eternal's Blinkit and Zepto are taking a more measured approach, focusing on improving service quality and customer retention rather than heavy discounting. “Blinkit’s market share is almost twice that of Swiggy (Instamart)," said Meena. “It is spending more on reducing delivery times, adding more categories, and expanding dark stores to enhance the customer experience."

This reflects a long-term play in a category where loyalty is built over time. “Grocery is a long-term market. Once you acquire a household, the focus should be on retaining it by providing better service," Meena said, adding that Blinkit is working to address structural challenges to ensure long-term viability.