Foodtech

Swiggy’s Revenue Jumps 24% in 2023; Quick Commerce Economics Improve, Reports Prosus

• ByStartupStory     |    June 25, 2024

Swiggy, the Indian food and grocery delivery giant, saw a 24% increase in revenue for the calendar year 2023, according to Prosus, the company’s largest shareholder. The Dutch-listed technology investment firm shared this update on Monday but did not disclose the exact revenue figures.

Swiggy’s adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) improved, showing a negative $261 million in 2023. The previous year’s Ebitda and aggregate loss figures were not provided by Prosus.

Prosus had previously reported its share in Swiggy’s loss at $180 million in 2022, due to significant investments in Instamart, Swiggy’s quick commerce vertical. This indicated a total loss of approximately $540 million for Swiggy in that year.

Swiggy faces stiff competition from Gurugram-based Zomato, which competes across food delivery, quick commerce, and dining out. Zomato turned profitable in the June 2023 quarter and has consistently reported net profits since. For the fiscal year ending March 2024, Zomato’s consolidated revenue was Rs 12,114 crore, with a net profit of Rs 351 crore.

In a strategic move, Swiggy has filed confidentially with the Securities and Exchange Board of India (Sebi) for a $1.25 billion initial public offering (IPO). Prosus, holding a 32.6% stake in Swiggy, is expected to be identified as the promoter in the IPO.

Prosus reported that Swiggy’s gross order value (GOV) grew by 26% in 2023, reaching $2.6 billion in 2022, with its ever-transacted user base expanding to 104 million by the end of December.

“Swiggy’s core food delivery business GOV grew by double digits on healthy order growth and higher average order value. Operating leverage improved as the business added revenue streams like restaurant advertising and introduced nominal platform fees which supported improved operational profitability,” Prosus stated in its annual report for the year ending March 2024.

Swiggy’s quick commerce segment also showed promising improvements in unit economics, driven by larger basket sizes, a broader user base, and enhanced operational efficiency.

“The quick-commerce business GOV grew much ahead of the ecommerce industry, led by geographical penetration (now 487 active dark stores across 26 cities) and SKU (stock keeping unit) expansion (over 9,500 unique items now listed on the platform),” Prosus noted.

While specific returns on investment in Swiggy were not disclosed due to the pending IPO, US asset manager Baron Capital marked up Swiggy’s valuation to $15.1 billion. Swiggy’s last funding round in January 2022 pegged its valuation at $10.7 billion.

In related news, Prosus highlighted that PayU India, its fintech unit, grew 11% in the fiscal year ending March 2024, reaching $444 million. However, PayU India’s profit margin declined from 3% in FY23 to a loss margin of 3% in FY24, attributed to a 15-month embargo by the Reserve Bank of India (RBI) on adding new merchants.

“India grew revenue 11% to $444 million, despite being unable to onboard new merchants due to the noted embargo during the year. Revenue growth was driven by increasing volumes from existing merchants and growing value-added services…,” Prosus explained. The embargo was lifted on April 23 this year, following PayU India’s in-principle authorization by the RBI to operate as a payment aggregator.

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