Swiggy parent’s losses mount 5X to Rs 2,363 crore

Bundl Technologies, which runs food delivery company Swiggy, clocked operating revenues of Rs 1,128 crore in the year ending March 2019, almost trebling from the previous year, as per filings made with the Ministry of Corporate Affairs.

The firm, however, saw its losses ballooning to Rs 2,363 crore amid fierce competition in its core food delivery business where its battling rival Zomato. The company’s revenues stood at Rs 442 crore, while its losses were at Rs 397 crore for FY 2018.

The South African internet and media group Naspers-backed venture saw its losses grow more than five fold due to the sharp increase in costs of the company, which included expanding to new geographies. Currently, Swiggy has operations in around 500 cities and, according to industry estimates, processes about 1.4 million orders a day.

Swiggy spent Rs 1,593 crore in delivery costs and Rs 423 crore on salaries and wages. The company also spent Rs 778 crore on marketing and advertising expenses to compete with Zomato. Part of Swiggy’s expenses can be accounted by Rs 113 crore lost in order cancellation.

“FY 18-19 has been another strong year of execution for Swiggy as we continued to grow our dominant market leadership position. We saw a 4.2x increase in order volumes and a 2.7x increase in operating revenue despite a higher baseline, underscoring our ability to grow in a sustainable manner over the long-term,” the company said.

“During the year, we made many strategic bets and investments in technology, brand and supply creation that have been the drivers of category growth in Indian food delivery and will bear fruit in Swiggy’s vision.”

For the financial year ending March 2019, Zomato reported a loss of Rs 1,001 crore on a revenue of Rs 1,397 crore, as per regulatory filings.

Both the players have been burning cash in the range of $40-50 million per month however Zomato said its October burn halved to $20 million.

In FY19, Swiggy earned Rs 1,074 crore by running its marketplace and Rs 67.5 crore through its private brands. The private brand revenue is set to rise as Swiggy expands its flagship cloud kitchen Bowl Company from Bengaluru to Mumbai, Pune and Delhi NCR. The company has also introduced a few other private brands in FY20.

Swiggy and Zomato are both raising fresh funds and are in talks to mop up around $500-$600 million.

Source:- https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/swiggy-parents-losses-mount-5x-to-rs-2363-crore/72726953