Swiggy On Track For $1 Billion Annual Revenue Amid Mounting Loss

The gross merchandise value, or GMV, of Swiggy’s mainstay food-ordering business grew 40% year-on-year in the first six months of 2022, even as order volume surged 38%, according to investor Prosus NV’s half-yearly financial results released on Wednesday. Total quick commerce and gross merchandise value grew 20 and 15 times, respectively.

The GMV of the food-ordering business stood at $1.3 billion, while that of quick commerce -- including Instamart -- was $257 million, the Amsterdam-listed investment firm said.

Prosus’ share of Swiggy’s revenue increased by 72% over the year earlier to $150 million, according to the report, reflecting higher average order values and increased revenue from delivery fees and ad sales.

Prosus held a 33% stake in Swiggy’s parent Bundl Technologies Pvt. Ltd. as of Sept. 30. Extrapolating that to 100%, the revenue clocks in at least $450 million in the first six months of the year. Swiggy, then, will at least earn $900 million for the full year, if not a full $1 billion.

The mounting loss, however, is a fly in the ointment. Prosus’ share of Swiggy’s trading loss from operations surged to $105 million in January-June 2022 from $34 million in the year-ago period, as the foodtech startup stepped up investments in its food-delivery business as well as Instamart to drive growth and expand footprint.

“We believe Swiggy is well-funded to capitalise on recent momentum and well-positioned to improve its competitiveness by investing in product and technology and reinforcing its artificial intelligence capabilities,” Prosus said in its half-yearly report.

As on June 30, Swiggy was connecting 262,600 restaurants to its patrons across 562 cities in India, with 298,843 delivery partners on the road. Prosus has so far invested $299 million in Swiggy.

Pandemic Revival

Prosus' numbers are proof Swiggy has emerged from a pandemic-induced slowdown in business.

Bundl Technologies' revenue fell 26.6% year-on-year to Rs 2,547 crore in the fiscal ended March 31, 2021, according to regulatory filings sourced from Tofler, as the company diversified into the grocery business under the Instamart brand. Net loss, however, shrank 59% to Rs 1,616 crore.

"Swiggy has seen a full recovery from the impact of the pandemic by focusing its efforts on reactivating users, increasing monthly frequency, and returning user conversion to pre-pandemic levels," Prosus said in its 2022 annual report.

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"Swiggy is also focused on expanding its quick commerce Instamart business, which performed well, increasing daily orders 10 times year-on-year. This resulted in accelerated growth in the grocery vertical, coupled with continued growth in the food delivery business."