Profitable, At Last: Swiggy’s Food Delivery Biz In The Black In March 2023

Foodtech unicorn Swiggy on Thursday (May 18) claimed to have achieved profitability in its food delivery business as of March 2023, according to cofounder and CEO Sriharsha Majety.

“Our sharp focus on innovation, coupled with strong execution has led to yet another milestone – As of March 2023, Swiggy’s food delivery business has turned profitable (After factoring in ALL corporate costs; excluding employee stock option costs),” Majety said in a blog post.

He added that the foodtech giant was one of the few global food delivery platforms to achieve profitability, though no numbers were revealed by the company in the blog post.

Swiggy had been on a massive cost-cutting spree throughout FY23, leaving no stone unturned in its bid to turn profitable. The foodtech platform jettisoned dud businesses, ramped up the pricing of its subscription services, and fired hundreds of employees in the process.

“We have reached this milestone while bringing tremendous benefits to all partners in our ecosystem. Our core value that the customer comes first has consistently been reciprocated with deep consumer love and industry-best NPS scores, repeat and retention rates. We continue to make strides in gaining customer favour, including strong traction in Tier 2 and 3 markets,” said Majety.

In FY22, Swiggy posted a consolidated loss of INR 3,629 Cr, while its revenue reached INR 5,704.9 Cr. Of the total revenue, INR 3,444.4 Cr was directly attributable to its food delivery business, along with an additional INR 87.5 Cr Swiggy made by selling food.

Swiggy’s announcement comes as a major win for the company at a time when it has been losing ground to Zomato and is also facing competition from government’s Open Network for Digital Commerce (ONDC). 

Swiggy’s rival Zomato said earlier this year that it had achieved adjusted EBITDA profitability. The latest development came a day before Zomato is scheduled to report its financial results for the quarter and year ended March 2023.

Talking of Swiggy’s future plans, Majety said it was looking forward to a similar result in its quick commerce vertical, Instamart. “We pioneered and built this category from the ground up, and have made disproportionate investments in Instamart given the attractiveness of the consumer proposition and its strategic importance to us.” 

Majety added that the foodtech had made strong progress on the profitability of the quick commerce business and was on track to hit “contribution neutrality” in the next few weeks.

The latest development also comes at a time when Swiggy has seen valuation cuts from its investors. While PE firm Invesco trimmed Swiggy’s valuation by 25% to $8 Bn, Baron Capital slashed the valuation of the decacorn by 34% on its books.