Swiggy witnessed a lag in its growth during FY21. The market seemed gloomy but that didn’t discourage Swiggy to scale its operations. It upgraded its services and with its most alluring feature, Swiggy revenue jumped to Rs.5,705 crore. And that alluring feature was none other than “Swiggy One” where you can get multiple benefits with just Rs.149 (for 3 months). However, this is just one side of the moon. The dark side is yet to be seen! What’s that? You may ask. Swiggy losses doubled while revenue crossed Rs.5,700 crore in FY22. Why? You may ask. Not just that but its valuation was also reduced to half! Really? Yes. You will get to know all of it in this write-up.
Swiggy Revenue breakdown
First of all, let’s look at the bright side of the company. In FY22, Swiggy earned revenue of Rs.5,705 crore. Do you know how much it earned last year (FY21)? Rs.2,547 crore. It is time to compare the Swiggy revenue of the last two fiscal years.
|Swiggy Revenue Sources||FY 22 (Financial Year 2022)||FY21 (Financial Year 2021)|
|Revenue from platform services||Rs.3,444 crore||Rs.1,879 crore|
|Sale of grocery & FMCG products||Rs.2,036 crore||Rs.517 crore|
|Sale of food||Rs.88 crore||Rs.83 crore|
|Other operating revenue||Rs.138 crore||Rs.67 crore|
|Total Revenue||Rs.5,705 crore||Rs.2,547 crore|
As you can see from the table, Swiggy revenue increased in this fiscal year. The revenue from platform services generated the highest chunk of the revenue. The sale of grocery and FMCG products i.e. from Swiggy Instamart is a second contributor to Swiggy revenue. It is quite fascinating! Isn’t it? But there is an intense dark side to this scenario. Expenses! You will get to know about it in the next section.
On the expense side, the outsourcing support cost turned out to be the largest expenditure of the company. As per the analysts, the reason behind this is the rising cost of outsourced labor and the establishment of dark stores. As you have seen in the business model of Swiggy, it has to spend a lot on marketing and advertisements too. Apart from that it spends on numerous segments. Now look at the following expenses that led to the losses for the company “Swiggy.”
|Expenses||FY 22 (Financial Year 2022)||FY21 (Financial Year 2021)|
|Outsourcing Support Cost||Rs.2,350 crore||Rs.1,031 crore|
|Employee Benefit Expenses||Rs.1,708 crore||Rs.1,085 crore|
|Cost of Materials Consumed||Rs.2,268 crore||Rs.570 crore|
|Advertising & Promotional Expenses||Rs.1,848.7 crore||Rs.461 crore|
|Communication & Technology Cost||Rs.330 crore||Rs.221 crore|
|Loss on Order Cancellation and Others||Rs.156.4 crore||Rs.124.5 crore|
|Other Expenses||Rs.912.8 crore||Rs.646.4 crore|
Now, you might have understood why Swiggy is drowning in deep losses despite earning massive revenue. However, the company looks at its expenses as potent investments that will contribute to a significant amount of revenue in the future.
Financials of Swiggy
The financials of the company Swiggy is summarized in the following table-
|Swiggy’s Financials||Amount (in crores)|
|Market Valuation||Rs.45,100 crore ($5.5 billion)|
|Revenue Earned||Rs.5,705 crore|
|Profit/Loss||Loss of Rs.3,629 crore|
Although it earned an appreciable amount of revenue from its numerous revenue sources. But the cash outflow in various expenses crossed the threshold. This means the amount spent on expenditures exceeded the amount of revenue earned. Eventually, it continues to face a significant amount of loss.
Future Plans of Swiggy
The online food delivery company is undergoing heated competition from its competitors like Zomato and ONDC. Therefore, it keeps on spending in numerous segments leading to improving its services. Swiggy lost its “decacorn” status too! Recently, it got a huge blow from one of its leading investors i.e. Baron Capital. They cut Swiggy’s valuation to $6.4 billion from 10.7 billion. Despite all these conditions, Swiggy is optimistic about getting profitable returns in the future!