Swiggy's food delivery business has turned profitable: CEO

Majety's blogpost comes two days after US-based asset management firm Baron Capital Group reduced its valuation of Swiggy by 34 per cent to USD 7.1 billion as of December 2022.
Image used for representational purpose only. (Photo | B P Deepu, EPS)
Image used for representational purpose only. (Photo | B P Deepu, EPS)

BENGALURU:  Amid valuation markdowns by US-based investment firms Invesco and Baron Capital, Swiggy on Thursday announced that its food delivery business has turned profitable as of March 2023. 

Started in 2014, the food delivery firm has managed to turn profitable after factoring in all corporate costs, excluding employee stock option costs.

Swiggy CEO and co-founder Sriharsha Majety in a blog post said that it is still very early days in India’s journey of eating out and food delivery.

“We are very sanguine about the growth potential over the next 2 decades. We will continue to make responsible and measured interventions to fuel further growth in food delivery. There are many underserved geographic and consumer segments and our goal remains to outpace industry growth by continuously investing in the right levers,” he said.

This announcement also comes at a time when the government-backed ONDC (Open Network for Digital Commerce) gaining momentum with an increasing number of food delivery orders on its platform.

Though experts said it is early days and that it is not an immediate risk for big players such as Zomato and Swiggy, this announcement is significant as the food tech major has seen its valuation cut in recent months. Also, this comes a day before Zomato is all set to report its earnings. Analysts estimate that Zomato’s losses for the fourth quarter will shrink. Zomato CEO Deepinder Goyal has congratulated Swiggy CEO and said ‘Nicely done’.

Recently, Invesco marked down the valuation of Swiggy to $5.5 billion and Baron Capital slashed the food delivery firm’s valuation by 34% to $7.3 billion. Swiggy's CEO also said they are excited about the trajectory of its quick commerce business, Instamart.

“The peak of our investments is behind us and today, Instamart is one of the leading players in the quick commerce space globally. In addition, we’ve also made strong progress on the profitability of the business and we’re on track to hit contribution neutrality for this 3-year-old business in the next few weeks,” he said.

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