Another Softbank Backed Massive Loss Making Company Swiggy Filing For IPO This Week, Plans To Pass Their Losses To The Retail Investors

Indian food-delivery platform Swiggy Ltd. is reportedly preparing to file for its initial public offering (IPO) in India, potentially as early as this week, according to sources familiar with the matter. This move would add to the growing list of high-profile share sales in the country, highlighting the increasing investor interest in India’s booming digital economy.

Swiggy’s IPO aims to raise over $1 billion, making it one of the most significant public offerings in the Indian market this year. The Bengaluru-based company is currently awaiting approval from the Securities and Exchange Board of India (SEBI) to move forward with its IPO filing. While the exact details regarding the size and timing of the offering are still under discussion, Swiggy’s decision to go public signifies the company’s confidence in its growth prospects and the overall potential of the Indian food delivery market.

Founded in 2014, Swiggy has quickly become a household name in India, partnering with over 150,000 restaurants across the nation. It has leveraged its extensive network to provide food delivery services in the world’s most populous country. Swiggy operates in a highly competitive market, where it goes head-to-head with other major players like Zomato Ltd., Amazon’s India unit, and Tata Group’s BigBasket. Zomato, one of Swiggy’s primary competitors, went public in 2021, setting a precedent for food delivery companies entering the public market.

Swiggy’s rapid growth has been fueled by substantial backing from investors, including the Japanese conglomerate SoftBank Group Corp. The company’s decision to go public comes at a time when global investors are increasingly eyeing the Indian market, seeking to tap into its economic growth and burgeoning middle class. The Indian IPO market has already seen a surge in activity this year, with approximately $7.8 billion raised through first-time share sales, surpassing the total proceeds of the previous two years combined, according to data compiled by Bloomberg.

Swiggy’s anticipated IPO would join a series of upcoming listings that are set to attract significant investor attention. For instance, Hyundai Motor Co. is planning an IPO for its Indian unit, which is expected to be one of the largest listings in the country. Additionally, LG Electronics Inc. has engaged banks to explore a potential IPO for its Indian business, aiming to raise as much as $1.5 billion. These listings indicate a robust pipeline of public offerings, underscoring the confidence in India’s economic trajectory and the growing appetite for investment in the region.

Swiggy’s success and potential IPO are reflective of broader trends in the Indian market. The country has witnessed a rapid expansion of its digital economy, particularly in sectors like e-commerce, food delivery, and fintech. The rise of digital platforms has been driven by a young and tech-savvy population, increasing internet penetration, and a shift toward digital payments. Swiggy has capitalized on these trends, expanding its services beyond food delivery into areas like grocery delivery with its Instamart service, further diversifying its revenue streams and enhancing its value proposition for investors.

While Swiggy’s move to go public is seen as a significant milestone, it also brings with it challenges. The company will have to navigate the regulatory landscape, market competition, and evolving consumer behavior in a post-pandemic world. However, with strong investor backing and a solid market presence, Swiggy’s IPO could mark a new chapter in India’s fast-growing digital economy.

In summary, Swiggy’s potential IPO is poised to be a landmark event in the Indian market, reflecting the country’s dynamic growth and the increasing global interest in Indian startups. As the company awaits regulatory approval, the details of its offering remain fluid, but its move toward an IPO underscores the ongoing transformation and maturation of India’s digital sector.

Swiggy Losses In Last 7 Years

Swiggy, one of India’s leading food delivery platforms, has reported significant losses over the past seven years as it focused on aggressive expansion, customer acquisition, and building a robust delivery network. Here’s a detailed overview of Swiggy’s reported losses over this period:

1. FY17:
   • Losses: ₹205 crore
   • During this period, Swiggy was heavily investing in expanding its delivery network, improving logistics, and acquiring customers in a market that was heating up with competition from other players like Zomato and Foodpanda.
2. FY18:
   • Losses: ₹385 crore
   • Swiggy doubled its losses compared to the previous fiscal year due to its aggressive expansion into new cities and increased marketing spend to capture market share in the burgeoning food delivery space.
3. FY19:
   • Losses: ₹2,363 crore
   • The company’s losses soared as it ramped up its efforts to dominate the market. This period saw Swiggy investing heavily in technology, expanding its delivery fleet, and diversifying its services, including the launch of Swiggy Stores.
4. FY20:
   • Losses: ₹3,768 crore
   • Swiggy’s losses further increased as it continued to invest in new verticals like Swiggy Go (delivery services for non-food items) and Swiggy Genie (instant pick-up and drop service). The company also faced stiff competition from Zomato, leading to higher discounts and customer acquisition costs.
5. FY21:
   • Losses: ₹1,314 crore
   • The pandemic year brought significant changes to Swiggy’s business. While there was a surge in demand for food delivery, Swiggy also had to scale back some operations and cut costs. The company reduced its losses compared to the previous year by optimizing operations and focusing on cost efficiency.
6. FY22:
   • Losses: ₹3,629 crore
   • Despite a rebound in demand post-pandemic, Swiggy’s losses increased again as it doubled down on its investments in grocery delivery (Instamart) and rapid delivery services. The company aimed to capture a broader market beyond food delivery, but this expansion came with high operational costs.
7. FY23 (Estimated):
   • Losses: Swiggy’s losses for FY23 were expected to remain high, potentially around ₹3,000-4,000 crore, due to continuous investments in expanding its quick commerce vertical, maintaining its market share in food delivery, and heavy discounting to attract and retain customers.

Swiggy’s strategy over these years has focused on rapid expansion, market dominance, and diversification into new business lines like grocery delivery and express delivery services. While this strategy has led to high losses, the company aims to build a sustainable and profitable business in the long term by expanding its service offerings and optimizing its operations.

Swiggy Funding In Last 7 Years

Swiggy has undergone multiple funding rounds over the past seven years, raising billions of dollars from various investors. Here is a detailed overview of Swiggy’s major funding rounds since 2017:

1. Series E – May 2017:
   • Amount: $80 million
   • Lead Investors: Naspers, DST Global, Accel, SAIF Partners
   • Purpose: The funding was aimed at expanding Swiggy’s operations and enhancing its logistics and technology infrastructure.
2. Series F – February 2018:
   • Amount: $100 million
   • Lead Investors: Naspers, Meituan-Dianping
   • Purpose: Swiggy aimed to strengthen its market leadership in the food delivery space in India. This funding round was also used to improve the customer experience by investing in technology and delivery infrastructure.
3. Series G – June 2018:
   • Amount: $210 million
   • Lead Investors: Naspers, DST Global
   • Purpose: The funds were utilized for Swiggy’s expansion into new cities and enhancing its delivery system. This round marked one of the largest funding injections into the Indian food delivery sector.
4. Series H – December 2018:
   • Amount: $1 billion
   • Lead Investors: Naspers, Tencent, Coatue Management, DST Global, Meituan-Dianping, Hillhouse Capital
   • Purpose: This massive funding round was aimed at consolidating Swiggy’s dominance in the Indian food delivery market. The funds were also used to explore new product lines, including Swiggy Stores and cloud kitchens.
5. Series I – February 2020:
   • Amount: $113 million
   • Lead Investors: Prosus Ventures (formerly Naspers), Meituan-Dianping, Wellington Management
   • Purpose: The investment was used to further expand Swiggy’s business, with a focus on strengthening its delivery network and enhancing its grocery delivery service, Swiggy Instamart.
6. Series J – April 2021:
   • Amount: $800 million
   • Lead Investors: Falcon Edge Capital, Amansa Capital, Think Investments, Carmignac, Goldman Sachs, Prosus Ventures
   • Purpose: This funding round was crucial as it came during the COVID-19 pandemic. Swiggy used the funds to scale its grocery delivery service, Instamart, and invest in the broader food delivery business to cater to the changing consumer behavior during the pandemic.
7. Series K – July 2021:
   • Amount: $1.25 billion
   • Lead Investors: SoftBank Vision Fund 2, Prosus Ventures, Accel, Wellington Management
   • Purpose: This round valued Swiggy at $5.5 billion, showcasing the company’s resilience and growth during the pandemic. The funds were used to diversify Swiggy’s offerings, including expanding Instamart and other services beyond food delivery.
8. Series L – January 2022:
   • Amount: $700 million
   • Lead Investors: Invesco, Baron Capital Group, Sumeru Venture, IIFL, Prosus Ventures
   • Purpose: This round valued Swiggy at $10.7 billion, making it one of the most valuable food delivery companies in India. The funding was directed toward further expanding Swiggy’s grocery delivery platform, Instamart, and other new business lines like Swiggy Genie.

Swiggy Was Founded In 2014, As of June 2024, Swiggy’s current valuation is estimated to be around $10.7 billion. Despite Being a 10 year old company with such massive valuation, swiggy has never been a profit making company.

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