Swiggy is an online food search and food delivery startup platform. Sriharsha Majety, Nandan Reddy and Rahul Jaimini established Swiggy in August, 2014 in Koramangala, Bengaluru. Flipkart, which is a successful Indian startup took six years to become Unicorn and on the other hand Swiggy became Unicorn in less than four years. Swiggy is present in 250+ cities of India.
Swiggy Historical Business Events
BITS-Pilani alumni – Sriharsha Majety and Nandan Reddy found Swiggy after bitter failure in Bundl Technologies, a logistics aggregator for e-commerce companies (shut down in June-2014 as the traction was low in that sector). As a result, they decided to focus on the hyperlocal food delivery business to provide the favorite food from nearby locations at home and with this thought got an idea to start the startup ‘Swiggy’. The online food ordering and delivery market was not attractive back then. Thus, Zomato, the leader in food-tech, had decided not to expand its delivery business, which was seemingly messy and non-viable during that period.
After getting good response, Swiggy rose funds in 2 rounds during the year to spruce-up technology, infrastructure, consolidate its footing in restaurant delivery and expand rapidly across the country. Swiggy started the services in Pune, Mumbai, Chennai, Gurgaon and Hyderabad.
By 2016, Swiggy’s team was growing at ~25% month on month. Swiggy had over 5000 restaurants on its platform and 3,000 delivery boys.
In December 2017, Swiggy acquired gourmet food startup ‘48East’ and brought on board the management of 48East as part of its strategy to broaden its senior leadership.
48East founders Joseph Cherian and Nabhojit Ghosh joined Swiggy to build the new supply business with Cherian as Chief Operating Officer (COO) for Swiggy Access – the delivery-only service in partnership with restaurants in new localities. In November 2017, Swiggy had launched Swiggy Access, a programme which allows its restaurant partners to set up kitchen spaces in neighborhoods where they didn’t operate.
Swiggy expanded business in 24 cities which included Jalandhar, Agra, Varanasi, Kota, Mangalore, Manipal and Amritsar. After the expansion, the company achieved total presence in 44 cities of India and over 40000 restaurants partners.
In August 2018, Swiggy acquired ‘Scootsy’, an intra-city delivery service provider for around $8M in an all-cash deal. Swiggy planned to strengthen Scootsy’s curated restaurant network and help the brand expand to newer cities using Swiggy’s operational strength. Scootsy was continued to operate as an independent app post the acquisition.
In September 2018, Swiggy acquired ‘Supr Daily’ a small milk delivery startup of Mumbai. Swiggy strategized to use Supr Daily for entering in the business of online grocery delivery. Swiggy became a Unicorn startup and valued a $1.1B in June 2018.
In February 2019, Swiggy entered into a deal for acquisition of Artificial Intelligence (AI) startup Kint.io. As part of this acqui-hire, the founding members of Kint.io Pavithra Solai Jawahar and Jagannathan Veeraraghavan were to join the company’s team. Acqui-hiring refers to buying out a company or an entity primarily for the skills and expertise of its staff, rather than for its products or services. The team at Kint.io will join the company to boost its computer vision technology and superior consumer experience. Kint.io is the first technology-led acqui-hire for Swiggy, as it makes large investments in its long-term strategy of building AI-first platforms.
Swiggy also launched ‘Swiggy Stores’ in February 2019, accessible on mobile app to order anything from medicines, meat, vegetables and other.
In June 2019, Swiggy launched a ‘Swiggy Daily’ app for offering the homemade meals by home-chefs and tiffin service providers. The service was available in Gurugram only and it will be available in Bengaluru and Mumbai in Upcoming months. The app will list over 30 options for every meal. The platform will include meal options from a mix of organised vendors like Homely, Lunchly, Fig, iDabba and Caloriesmart, popular tiffin services like Dial a Meal and Dailymeals.
By the beginning of August 2019, Swiggy launched services across 185 towns. According to industry estimates, Swiggy clocks 900,000-1 million daily orders, and burns close to $40 million amounts of cash every month.
About the Founders of Swiggy
Sriharsha Majety nicknamed as Harsha is the founder and CEO of Swiggy. Harsha holds a M.Sc. (Physics) from Birla Institute of Technology and Science (BITS), Pilani and PGDM in finance in 2011 from IIM, Kolkata. Sriharsha Majety nicknamed as Harsha is the founder and CEO of Swiggy. Harsha holds a M.Sc. (Physics) from Birla Institute of Technology and Science (BITS), Pilani and PGDM in finance in 2011 from IIM, Kolkata.
After completing his study Harsha went to London for working as a trader in an Investment Bank. Soon he realized that he is not passionate for his job and he resigned. After coming back India, his innovative mind gave him an idea of starting a logistics startup. The logistic sector was an unorganized market in India. In 2013 Sriharsha started Bundl, a logistics startup with Nandan Reddy. This startup did not achieve a great success. Learning from their mistakes Harsha thought of another startup in food delivery and finally launched ‘Swiggy’.
Nandan Reddy is the Co-founder of Swiggy. After completing his studies in M.Sc. (Physics) from Birla Institute of Technology and Science (BITS), Pilani, he joined Sourcepilani ( India’s first rural BPO ) as a Head of operations (Social Media). He has built another start-up around a tablet-based-POS software for restaurants for billing and inventory management. His job experience also include working as an Associate Business Consulting in Intellcap. He is the founding partner of Zurna, a 40 seater Hyderabadi restaurant.
He is also a co-founder of Swiggy. Rahul did his M.tech in computer science and engineering from IIT, Kharagpur. He worked at NetApp as technical staff member for 1 year and 9 months. Rahul served as a software engineer at Myntra.com for 2 years and 3 months. Coding and software development of Swiggy is managed by Rahul Jaimani.
Business Model of Swiggy
Business Model of Swiggy is based on commission on delivery of food and groceries. Commission charged by Swiggy from restaurants is between 15%-30% including Delivery and payment charges. Delivery charges are charged of Rs. 25-50 when order value is below Rs.99 and Rs. 10-30 when order value is above Rs. 99.
Online Grocery Store ‘Swiggy Store’ is for online grocery shopping and home delivery. Advertising also contributes to the revenue. Restaurant pays money to promote their food items on Swiggy.
There is a Swiggy subscription scheme ‘Swiggy Super’ in which no delivery charges are charged on order above Rs.99 and no surge fees (Surge fees is the extra money charged during high demand or rain) is charged.
Swiggy Affiliate program: the credit card holders of HSBC, Citibank and ICICI bank are provided with special discounts.
Swiggy Access is for providing kitchen space to the restaurant partners where the restaurants do not have reach. 40 restaurant partners have been selected and these restaurant partners have to pay the commission and rent to Swiggy.
Funds Raised by Swiggy over the years since Inception:
April 2015 : Series A
In April 2015, Swiggy rose $2.5M (~Rs. 12.5 crore) from San-Francisco based ‘Accel Partners’ and Hongkong ‘SAIF Partners’. Funding was for the purpose of team and geographical expansion in India.
June 2015 : Series B
In just 5 months of Series A round, In June 2015, Swiggy snapped funding worth $16.5M (~Ra. 105 crore) led by new investor ‘Norwest Venture Partners’, with participation from existing investors ‘SAIF Partners’ and ‘Accel Partners’ and a global undisclosed entity.
January 2016 : Series C
Swiggy rose $35M (Rs. 230 crore) from new investors New York based ‘Harmony Partner’, Singapore based ‘RB investment’ and existing investors ‘Norwest Venture Partners’, ‘SAIF Partners’ and ‘Accel Partners’. Funds were utilized for acquisition, adding restaurants, technology upgrades, hiring etc.
May 2016 : Series C
In tranche 2 of the Series C round, ‘Norwest Venture Partners’, ‘DST Global’ and ‘Accel Partners’ invested $7M (Rs. 47 crore) in Swiggy.
September 2016 : Series D
‘Bessemer Venture Partners’, ‘Norwest Venture Partners’, ‘Accel Partners’ and ‘SAIF Partners’ invested sum of $15M.
Swiggy was valued close to $200 million when it raised $15 million from Bessemer Venture Partners in September 2016.
May 2017 : Series E
Swiggy raised $80 million in series E round led by South Africa global internet and entertainment group ‘Naspers’, along with participation from existing investors ‘Accel Partners’, ‘SAIF Partners’, ‘Bessemer Venture Partners’, ‘Harmony Partners’ and ‘Norwest Venture Partners’. The company planned to make significant investments in technology, including automation, data sciences, machine learning and personalization.
February 2018: Series F
Existing investor ‘Naspers’ and a new investor – Chinese internet firm ‘Meituan-Dianping’, which had an online platform for a range of services including food delivery and restaurant, provided funding of $100 million. Swiggy’s valuation went up to roughly $700M.
June 2018: Series G
Existing investors ‘Naspers’, ‘DST Global’, ‘Meituan-Dianping’ and new investor ‘Coatue Management’ invested $210M in Swiggy. The investors valued Swiggy at roughly $1.3 billion, surpassing rival Zomato’s $1.1 billion valuation based on a February fund-raising round. Funds were raised for spending on Expansion, Technology and Branding.
December 2018: Series H
New investors China’s ‘Tencent Holdings Ltd’, ‘Hillhouse Capital’, ‘Wellington Management Co.’ and existing investor ‘Naspers’ invested $1B in Swiggy. This is the highest amount raised by a startup in India in a single round. Valuation of Swiggy crossed $3 Billion and it was valued at $3.3 Billion.
2019: Swiggy’s Latest Funding
In June 2019, Swiggy was in advanced talks to raise as much as $1 billion from investors, including $300-500 million from SoftBank Group. If the deal goes through, it will be SoftBank’s first direct investment in a food tech business in India.
At starting of August 2019, Swiggy has been in advanced stages of closing a $700-750 million round led by existing investor Naspers. Naspers will pump in around $350 million, while a consortium of Korean investors, including STIC Investments and Korea Omega Investment, will together chip in with $50 million. The latest round, which comes over eight months after Swiggy raised $1 billion, will value the company at around $4 billion.
- In 2015, Swiggy partnered with Hamburger chain ‘Burger King’ to be the exclusive pan-India partner for Burger King and to take care of their logistics for all 23 outlets in Mumbai, Pune, Bengaluru, Delhi and Gurgaon.
- In 2017, Swiggy tied-up with business loan provider ‘Indifi Technologies’ for providing collateral free loans to the restaurant partners of Swiggy. The financing program was named Swiggy Capital Assist to provide collateral-free loans without initial deposits.
- In 2017, Swiggy also partnered with ‘Google Local Guides’ to offer discounts to Google map reviewers and to help Google user in exploring restaurants.
Swiggy earned revenue of Rs. 442 crore in FY18 which is more than three times as compared to Rs. 133 crore in FY17. Losses also doubled from Rs. 200 crore in FY17 to Rs. 390 crore in FY18.
Swiggy’s cash burn has been $30-$40 million per months on account of discounts being offered to new customers and to retain old ones as per industry estimates.
Swiggy is market leader in the food delivery market. There is a cut-throat competition in the food delivery startup/food-tech industry with Swiggy, Zomato, Foodpanda, Ubers-Eats as major players.
Zomato is the main competitor of Swiggy and both are aggressively growing food delivery startup companies. Its valuation is also above $3 billion. Swiggy and Zomato are in direct competition for attracting the customers and offering discounts. Both are in talks to raise more funds from investors. Zomato has presence in 24 countries. In India Zomato is present in more than 500 cities and Swiggy is present in more than 250 cities.
Foodpanda backed by Ola is also a competitor but now it has shifted the focus from food delivery to cloud kitchen business.
Uber’s food delivery startup is also in race and facing stiff competition from Swiggy and Zomato. Uber-Eats has achieved some success in the last year even in such competitive industry.
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References: News Publications, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews.
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