Swiggy: The Food Tech Decacorn
By Sonali Munda,
About the Company and the Founder(s):
Swiggy is an online food delivery and food ordering platform. Swiggy was founded in July 2014 by Sriharsha Majety and Nandan Reddy. It is based in Bangalore, India, operating in 500 cities across the country. Along with Swiggy being a food delivery platform, it also has two more segments in which it has diversified and those are:
Swiggy Instamart, a chain of online convenience stores of Swiggy, provides on-demand groceries deliveries.
Along with, it provides a same-day package delivery service under the name of “Swiggy Genie”.
History of Swiggy Achieving the Unicorn Status?
In 2013, Sriharsha Majety and Nandan Reddy, the two founders, designed an e-commerce website called Bundl to facilitate courier service and shipping across India. At that time when Bundl came into the market, Foodpanda (later acquired by Ola Cabs), TinyOwl (later acquired by Zomato), and Ola Cafe (later closed) were some of the notable food sectors which were struggling. Then in 2014, Majety and Reddy approached Rahul Jaimini, who was formerly with Myntra, and founded Swiggy and parent holding company Bundl Technologies. Since then, Swiggy has diversified itself into three different segments, first, Swiggy from which it takes the order and delivers food, second, Swiggy Instamart, from which on-demand groceries are delivered and third, Swiggy Genie, which is Swiggy’s logistics segment that provides the facility to deliver customers packages from one destination to another destination on the same day.
In July 2021, Swiggy’s valuation was around $5.5 million after receiving $1.25 billion in its investment from SoftBank. Then, it was in this year of January that it received an investment of $700 million from Invesco, an American marquee investor making Swiggy achieve the decacorn status. So, what made Swiggy pool in such a great amount? The co-founder, Sriharsha Majety claims that Swiggy’s Instamart delivers 1 million orders per week. Also, analysing his business model, he claims that in just 17 months the gross merchandise value (GMV) of Swiggy Instamart has exceeded faster than Swiggy’s food delivery segment in the last 40 months. Only seeing this potential, Invesco made a huge amount of investment in Swiggy.
Founder’s(s’) Shares/Stakes in the Company:
Sriharsha Majety holds the biggest stake in the company with 5.54% equity in the company. Majety, the face of the company and the chief executive, holds 54,690 equity shares valued at Rs 1291.4 crore ($172.2 million), per the calculation based on the filings. The third co-founder holds a 2.5% stake consisting of 24,690 equity shares of the company. Whereas, the second co-founder of the company, Rahul Jamini has a 2% stake in the company. He holds the lowest stake among all with 19,690 equity shares valuing it at nearly Rs 465 crore ($62 million).
Investors and their Investments:
Acquisitions by the Company:
Fingerlix 48East Supr Daily
Acquired for $4.39M Amount Undisclosed Amount Undisclosed
(2019) (2016) (2015)
Kint Scootsy Dineout
Amount Undisclosed Amount Undisclosed Amount Undisclosed
(2014) (2014) (2012)
Current Market Valuation of the Company:
The current valuation of Swiggy is $10.7 billion. It received its investment of $700 million from a marquee lender, Invesco that almost doubled the valuation of Swiggy to $10.7 billion and apparently, making this food tech achieve the decacorn status.
Competitors:
Zomato DoorDash Ubereats
GrubHub Deliveroo Postmates
ChowNow Onfleet UrbanPiper
Caviar
SWOT Analysis of the Company:
Strengths-
Swiggy is popular for its quick delivery service.
Swiggy maintains a splendid interface for customers to view the app and order food comfortably.
One of the major strengths of Swiggy is that its employees are well-trained.
Swiggy’s extensive availability of menu is also a plus. It provides a wide range of eateries around the customer’s location and also has a filter of veg and non-veg preference.
Swiggy is neat at its packing of the product. The hygiene part is also well-maintained by Swiggy.
Weaknesses-
Many competitors increase the customer’s requirements and expand to more restaurants, while, Swiggy only takes orders that are from the restaurants located within the zone of the customers.
Swiggy’s brand awareness is less than its other competitors. Swiggy, in order to increase its brand awareness and have the right brand image, should create more impactful marketing strategies.
Swiggy’s delivery charges make the total amount of the product ordered rise higher. So this makes people feel reluctant to use it whereas, other of its competitors provide discount coupons every now and then to the customers’ food orders which brings down the total amount of the order.
Opportunities-
Swiggy sees a vast opportunity in the marketplace growth. It already has a vast customer base and is likely to increase more.
If Swiggy focuses on building its brand name and increasing its brand awareness, then it will also get the scope for increasing its market share.
Swiggy can look into decreasing its delivery charges, in order to encourage a more customer base.
Threats-
Currently, Swiggy has lesser customers, which may be due to the availability of its competitors providing better switching options for the customers.
As, people are more health conscious these days, and Swiggy looks out for restaurants within the zone of the customer only, it may sometimes fail to check out the hygiene of the restaurants. Resulting in a degradation of the brand name.
Future Plans of the Company:
Apparently, Zomato has been a tough competitor of Swiggy among all. Zomato was giving tough competition to Swiggy until Swiggy became a decacorn. A lot has changed in the last 6 months. If we look at the last investment in Swiggy and compare it with the current market valuation of Zomato, then Zomato is valued at around $9 billion while Swiggy had raised funds in the last round at a valuation of over $10 billion.
Looking at this hike and beating its strongest competitor, Swiggy plans to raise $800 million IPO in the upcoming year.
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