Swiggy’s revenue surged by 45% to reach Rs 8,625 crore in FY23, but the loss expanded to Rs 4,179 crore

Swiggy, the food and grocery delivery company, witnessed a 45% rise in operating revenue to Rs 8,265 crore in the fiscal year ending March 2023. Despite this growth, the net loss increased by 15% to Rs 4,179 crore.

 The Prosus-backed firm, currently gearing up for an IPO, incurred significant expenses during the year, particularly in expanding its quick-commerce vertical, Instamart. Swiggy’s total expenses for FY23 reached a substantial Rs 12,884 crore, marking a 34% increase compared to the previous year, as per regulatory filings from Tofler.

Apart from purchasing stock-in-trade, advertising and promotional expenses stood out as Swiggy’s significant cost factor. The company’s marketing expenditure increased to Rs 2,362 crore, representing 28% of operating revenue in FY23, a notable decrease from 44% in FY22.

Swiggy, based in Bengaluru, also experienced a rise in employee benefit expenses in FY23, reaching Rs 2,130 crore compared to Rs 1,708 crore in the previous year.

As of January 25, Swiggy, with a current workforce of 5,500-6,000 employees, is planning a 6% reduction, affecting 350-400 roles in areas such as technology, call centres, and corporate functions.

This decision comes as the company strives to streamline its operations, with a focus on achieving profitability leading up to its $1 billion IPO.

Before this, in January of the previous year, Swiggy underwent a companywide restructuring, resulting in the layoffs of 380 employees.

By May of that year, Swiggy’s co-founder and CEO, Sriharsha Majety, announced that the company’s food delivery business had achieved profitability by March 2023, considering all corporate costs except for employee stock option costs.

Revenue Overview

The company mainly generates revenue through online platform services offered to merchants like restaurants, grocery stores, and delivery partners. Additional income streams include advertising services, food and goods sales, subscriptions, and other platform services.

Breaking down the revenue for FY23, Swiggy earned Rs 3,352 crore from the sale of food and traded goods, marking a 58% increase from the previous year. The larger component of its revenue, Rs 4,786 crore, came from the sale of services, witnessing a 39% year-on-year growth.

In comparison, Swiggy’s main competitor, Zomato, reported a consolidated operating revenue of Rs 7,079 crore in FY23, growing by 69% year-on-year. Zomato recorded a net loss of Rs 971 crore for FY23, an improvement from Rs 1,222 crore in FY22.

Notably, Swiggy and Zomato compete in food delivery, quick-commerce, and dining out segments. While Swiggy focuses on parcel delivery services, Zomato operates the Hyperpure grocery supply vertical and an event-ticketing business. In the first two quarters of the ongoing fiscal year, Zomato turned profitable, with a net profit of Rs 38 crore for the April-September period.

During FY23, Swiggy acquired restaurant tech and dining-out platform Dineout in an all-stock deal from Times Internet, the digital media arm of Bennett, Coleman and Company Ltd (Times Group.

In the current fiscal year, according to Prosus, Swiggy’s largest shareholder, the company’s core food business grew by 17% in the six months ending September 30, reaching a gross merchandise value (GMV) of $1.43 billion. Simultaneously, the quick-commerce business Instamart witnessed a 63% growth in GMV.

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