SWIGGY LIMITED

ABOUT

Swiggy is a food delivery platform at its core, the services of which can be accessed from Android and IOS devices, and through the website. It partners with a wide range of restaurants and provides easy access to diverse food dishes from varying cuisines. Furthermore, it also accepts feedback and ratings from the customers that help others pick their restaurants and choices of dishes wisely.

As soon as a delivery is done, the customer is entitled to give feedback, and rate the food, and the delivery services. This insightful feedback guarantees that Swiggy keeps up its quality standards and that the user experience is always being improved.

INDUSTRY

A Statista report analysis indicates that the Indian online food delivery business is expected to develop significantly, with an anticipated revenue of US $43.78 billion by 2024. The sector exhibits strong potential for progress, as evidenced by the astounding 16.14% annual growth rate (CAGR 2024-2029) that this surge represents.

The market size is expected to reach US $92.50 billion by 2029, highlighting the enormous potential in India's rapidly expanding online meal delivery sector. This prediction emphasizes how changing customer tastes and technology breakthroughs are changing the face of the food sector and leading to a greater dependence on digital platforms for meal delivery services.

FOUNDERS AND TEAM

Lakshmi Nandan Reddy, Rahul Jaimini, and Sriharsha Majety (CEO and Co-Founder) founded Swiggy in 2014.

Sriharsha Majety is the CEO and Co-Founder of Swiggy. He had completed a B.E in Electrical and Electronics along with an M.Sc in Physics from BITS Pilani in the year 2008. Sriharsha then went to study the CFA program at the CFA Institute and managed to complete level II of the program. After this, he considered enrolling for an MBA in Finance and chose IIM, Calcutta, from where he graduated in 2011. Before Swiggy, Majety worked as the recruitment coordinator for IIM and was also a part of the rates trading Desk in London at Nomura International. In the year 2013, he co-founded Bundl Technologies Pvt Ltd along with Nandan Reddy, which became the cradle for Swiggy.

Lakshmi Nandan Reddy is the Co-Founder of Swiggy. He is also a BITS Pilani alumnus, who pursued M.Sc from the same college and completed it in 2010. Reddy worked as the head of the operations of social media at SourcePilani, the first BPO for rural India, for about 2 years. He was the founding partner of Zurna, a restaurant in Hyderabad, after which he co-founded Bundl, which later on led to Swiggy.

STARTUP STORY

Swiggy wasn't started as a food delivery business. Yes, you might hear this for the first time, but it is how it is. Sriharsha spent over 6 months cycling across Europe with a business idea in 2013. The first idea that struck his mind was that of a backpacking chain of hostels that would help foreigners when they look to visit India.

In the same year, Sriharsha and Nandan came together to build a company that would empower courier services across the country and would stand as a logistics solution. They named it Bundl Technologies Private Limited. However, Bundl did not turn out successful and forced the founders to shut down the business in 2014. Following its failure, Majety began his research and discovered much potential in the food industry. This led to the birth of Swiggy, an online food delivery company. They met Rahul Jaimini, who helped them build the software, and the company was finally founded in August 2014.

When Swiggy came to the market, the food delivery sector already had applications like Foodpanda, Tinyowl, and Ola Café. Foodpanda and Tinyowl were later acquired by Ola Cabs and Zomato respectively, and Ola café was eventually shut down, just barely a year old. While all these companies struggled, Swiggy started in 2014 with 6 delivery boys providing food from 25 restaurants, and at the end of its first year, in March 2015, the company served 1 million orders per month. This is how the journey started for the food tech giant.

MISSION AND VISION

The mission on the company's website states as "Our mission is to elevate the quality of life for the urban consumer with unparalleled convenience. Convenience is what makes us tick. It's what makes us get out of bed and say, "Let's do this."

The Swiggy Vision is "to be the leading local service provider in India. By offering a wide range of service alternatives, they hope to redefine ease for all users and become the country's easiest and most accessible platform."

PRODUCTS AND FEATURES

Swiggy has launched many products and features. Some of the features are:

• Swiggy      Photoshoot: To improve the visual attractiveness of restaurant menus,      Swiggy introduces an AI-based solution on November 8, 2023
• Swiggy      Introduces Learning Station: To offer customized content for      restaurant partners' growth, Swiggy Presents Learning Station on September      13, 2023
• The      Swiggy Moonlighting Policy permits delivery employees to work regular      jobs in addition to extracurricular activities on August 24, 2023
• Swiggy      Menu Score Tool, which provides restaurant partners with data-driven      recommendations to increase conversions in 2023
• Co-branded      credit cards were introduced by Swiggy in collaboration with      Mastercard and HDFC Bank to improve customers' purchasing experiences on      July 26, 2023
• Swiggy      WhatToEat function, which allows users to browse meal options according to      their appetites and moods on July 2023
• With      the launch of Swiggy Mini, fee-free product sales are now possible      throughout India on April 2023
• Swiggy      Launchpad: Offering new restaurant partners a commission-free first      month, Swiggy Launchpad is live as per the news report of March 2023
• Swiggy      Dine Out Offers: Providing millions of Swiggy users in 24 cities with      discounts at over 18,000 restaurants in February 2022
• Swiggy      Extends Cloud Cooking Business: To open restaurants in new areas,      Swiggy is extending its Cloud Kitchen program in July 2022
• Swiggy      Affiliate Program: Offering a lucrative affiliate program to people      who send Swiggy customers

BUSINESS MODEL

Swiggy has established itself as a major participant in the hyperlocal on-demand food delivery market by using state-of-the-art technology to link consumers with their preferred restaurants and vital suppliers. With a large selection of eateries and retail establishments including extensive menus and pricing, the platform provides a one-stop shop for consumers looking for convenience and diversity.

In addition to delivering food, Swiggy also offers services for buying groceries and other requirements, which strengthens its value proposition and meets a range of customer demands. Swiggy's operations revolve around crucial tasks like overseeing payment and delivery procedures, establishing alliances with nearby businesses, and orienting delivery providers and suppliers to guarantee smooth transactions and effective services.

Swiggy's client segmentation demonstrates its flexibility and dedication to satisfying changing customer needs. It serves a range of consumer demographics, such as those who enjoy the ease of placing orders from home, look for hassle-free online shopping, or depend on delivery services for their purchases.

Enabled by a strong technological infrastructure, a large network of local partners, and a specialized delivery fleet, Swiggy maintains its dedication to efficiency, dependability, and client happiness. Swiggy is a leader in hyperlocal delivery, and it will continue to improve the overall consumer experience by offering unmatched convenience and flexibility with features like unconstrained ordering, easy online payments, and a variety of payment options.

REVENUE MODEL

Swiggy has expanded its streams of revenue throughout the years. Here are some prominent streams that the company currently draws its revenue from:

Delivery charges

Customers are Swiggy's main source of income. A little delivery cost is charged by the business, and it goes up based on the overall amount of the order. Moreover, Swiggy frequently increases the fees during periods of exceptional weather or excessive demand.

Commissions

The commissions that Swiggy gets are a significant source of income for the company. These commissions are gathered from the eateries to produce sales leads and use Swiggy's fleet to deliver the food.

Advertising

Swiggy also earns some revenue with:

1. Banner      Promotions – Swiggy encourages restaurants to promote their brand      via display ads on its app. This helps all the restaurants that are      partnered with Swiggy from different regions, to receive considerable      visibility against the payments they make.
2. Priority      listing of restaurants – Swiggy has an option for priority      listing and in them, the company includes select restaurants against      premium rates. A restaurant has to pay more if it wants to be displayed      ahead of its peers.

Platform Fees

Swiggy is also earning revenue from platform fees, which started in April 2023 in cities like Bangalore, Hyderabad, and Chennai. They are charging Rs. 2 as a platform fees for every order.

Swiggy Access

Produces income by renting out fully functional cooking areas to restaurant partners, allowing them to grow into new neighborhoods.
Swiggy Super Memberships: Offers members advantages like priority issue resolution and spike price-free orders in exchange for a subscription-based income stream.

Swiggy Go

Expand revenue sources by generating a new revenue stream for the business by providing quick package pick-and-drop services.

Instamart

Produces income via expedited grocery delivery, guaranteeing prompt delivery and meeting clients' urgent requirements.

Swiggy Genie

Makes money by charging for on-demand pick-and-drop services for a range of products, giving consumers convenience and making money from the delivery process.

Swiggy Bazaar

To enter the social commerce space, Swiggy intends to make money by offering fresh farm produce and food FMCG on its platform.

Affiliate Income

Increases sales for the partner company and brings in money by collaborating with financial institutions to provide clients discounts when they use their credit and debit cards.

Funding and Investors

Swiggy has seen a total of $3.6 billion worth of funding over 16 rounds.

Amitabh Bachchan’s family office has purchased a small stake in Swiggy by buying shares from the company’s employees and early investors, according to sources. Raamdeo Agrawal, chairman of Motilal Oswal Financial Services, has also invested in Swiggy, as quick-commerce companies are currently seeing a surge in fundraising. Additionally, Hindustan Composite’s board has agreed to buy 1,50,000 equity shares in Swiggy, investing INR 5.17 crore, as per a disclosure made through the National Stock Exchange (NSE).

GROWTH

Swiggy: Growth Highlights are:

• It      has 1,50,000+ restaurant partners countrywide as of April 2024
• It      has 2,60,000+ delivery executives as of April 2024
• It      has a presence in 500+ cities in PAN India as of April 2024
• The valuation      of Swiggy is $12.7 billion as per news report of April 9, 2024

FINANCIALS

Swiggy reported a 36% rise in operating revenue to INR 11,247 crore in FY24 ahead of its IPO and reduced its losses by 44% to INR 2,350 crore. In the first three-quarters of FY24, it earned INR 5,476 crore with an INR 1,600 crore loss.

IPO

Swiggy is planning to raise INR 5,000 crore through its upcoming IPO and will ask shareholders for approval at an EGM on October 3, 2024. For the year ending March 31, 2024, Swiggy saw a 36% growth in operating revenue and reduced its net loss by 44%. The company had earlier aimed to raise INR 3,750 crore in fresh funds, along with an INR 6,664 crore offer for sale. However, the final size of the IPO may change from what it is currently asking shareholders to approve.

Competitors

Though Swiggy boasts of a huge market now, it has always witnessed tough market competition from companies like:

• Zomato
• Faasos
• Box8

Some other competitors of Swiggy include Zepto, Dunzo, FreshMenu, etc.

Future Plans

Swiggy is aiming for a valuation of about $15 billion in its upcoming stock market debut, where it plans to raise $1-1.2 billion as per the sources. If successful, it would be one of the largest Indian initial public offerings (IPOs) this year.

Swiggy formally became a public company on April 8, 2024. The company's status with the Registrar of Companies has been updated after a resolution adopted by its board of directors. This update represents a significant step towards the company's definitive initial public offering (IPO) plan, which is slated to take place in the second half of this year. The holding company's name has been changed from Swiggy Private Limited to Swiggy Limited as part of this transformation, reflecting its development as a publicly traded company.

After reaching this momentous milestone, Swiggy hopes to take advantage of its newfound prominence and start growing and expanding to fully utilize the enormous potential of the public markets. This calculated action highlights Swiggy's dedication to seizing fresh opportunities, increasing shareholder value, and reaffirming its position as the industry leader in rapid commerce and food.