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Swiggy to Invest Rs 1,600 Crore in Scootsy Logistics to Expand Dark Store Network

• ByStartupStory     |    December 4, 2024

Food delivery giant Swiggy has announced a significant investment of Rs 1,600 crore in its subsidiary, Scootsy Logistics Private Limited. This investment will be made through a subscription to Scootsy’s rights issue. Scootsy, which was originally acquired by Swiggy in 2018 for an all-cash deal, was an on-demand premium food delivery service. However, the company shut down Scootsy’s operations in 2020. Despite this, Swiggy continues to see potential in the subsidiary, which will now be pivotal in expanding its dark store network.

As part of Swiggy’s strategy to capitalize on the booming quick commerce sector, Scootsy is set to play a key role in opening approximately 538 dark stores. This move aligns with Swiggy’s broader vision of strengthening its position in the fast-growing online grocery and quick delivery space.

In addition to the Scootsy investment, Swiggy has disclosed the incorporation of a new wholly owned subsidiary. In its quarterly results, the company stated that a portion of the funds raised through its initial public offering (IPO) would be directed towards Instamart and its expansion, with up to Rs 1,350 crore allocated for this purpose. Additionally, Rs 250 crore will be infused for working capital.

For the quarter ending September 2024, Swiggy reported a slight year-on-year (YoY) decline in its net loss, which narrowed to Rs 625.5 crore compared to Rs 657 crore in the same period last year. However, on a quarter-on-quarter (QoQ) basis, the loss showed a marginal increase.

Swiggy’s revenue for Q2 FY25 saw a significant rise of 11.8% on a QoQ basis, reaching Rs 3,601 crore, up from Rs 3,222 crore in the previous quarter. The company also saw a 30% growth in revenue when compared to the same quarter in the previous year.

Swiggy, which went public on November 6, 2024, reported a slight dip in its stock price. At 3:30 pm on its listing day, Swiggy’s stock closed 0.55% lower at Rs 491 on the National Stock Exchange (NSE), down from Rs 514.68 before the announcement of its quarterly results.

Swiggy’s IPO, valued at Rs 11,327 crore, received an overwhelming response, being oversubscribed 3.59 times, signaling strong investor interest in the company’s future growth and expansion plans.

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