In a significant milestone, foodtech giant Swiggy’s food delivery segment has registered profitability for the first time since its initiation in 2014. The announcement was made by Co-founder and CEO Sriharsha Majety via a blogpost on Thursday. The profitability includes all corporate expenses, excluding those related to the employee stock ownership plan.
Majety shared his enthusiasm about this achievement, considering it a global benchmark in food delivery, with Swiggy becoming one of the very few international food delivery platforms to hit profitability in under nine years of operation. The company now aims to expand its influence in the Tier II and III markets.
Majety also mentioned Swiggy’s strategic investment in the quick commerce segment, with its subsidiary Instamart. He revealed that Instamart has shown solid progress towards profitability and anticipates it to reach contribution neutrality in the following weeks.
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Despite this positive news, Swiggy has faced valuation markdowns from investors like Baron Capital and Invesco. Baron Capital recently reduced its investment value in Swiggy by 34%, from $76.8 million to $50.9 million. Invesco also cut Swiggy’s valuation twice this year to $5.5 billion, down from $10.7 billion in April.
In January 2022, these investors participated in Swiggy’s massive $700 million funding round that boosted its valuation, promoting it to a decacorn status.
On the operational side, Swiggy recently closed its premium grocery delivery service, Handpicked, and laid off 380 employees in January. Moreover, it shut down its meat marketplace. Despite these challenges, Swiggy’s FY22 revenue doubled to Rs 5,705 crore from Rs 2,457 crore in FY21, although its losses also broadened to Rs 3,629 crore.
Media reports suggest that Swiggy is preparing for an IPO by September.
