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As losses widen, Swiggy can’t peg its future to quick commerce

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Pranav Balakrishnan

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Gaurav Tyagi

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Pranav Balakrishnan

47 reads
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Gaurav Tyagi

29 reads

Prosus’ annual report shows that Swiggy’s losses continue to mount even though its Instamart business scaled rapidly. With the unit economics of quick commerce proving difficult to tame, however, Swiggy will have to find other ways to bolster its bottom line

June 28, 2023

8 MINS READ

Key Takeaways

  • Swiggy’s losses for 2022 have widened to just over $548 million, according to the annual report of Prosus
  • While its overall GMV has grown 13% to $2.6 billion, it has seen the GMV growth of its core food delivery business slow down
  • Instamart, its quick commerce business, is growing at a rate of knots. But the business is expensive to scale and growth is already tapering off
  • As investors demand the company shift focus from growth to profitability, Swiggy is banking on low-cost experiments and going beyond India’s large cities to turn things around

On June 27, Prosus—foodtech major Swiggy’s biggest backer—filed its annual report. In it, the global consumer internet group offered a glimpse into Bengaluru-based Swiggy’s performance for the year ended December 2022.

In 2022, Prosus, which holds a 32.83% stake in Swiggy, stated that its share of the startup’s overall losses stood at $180 million. This is an 80% rise from the previous calendar year, where its share of overall losses stood at $100 million. Extrapolating based on Prosus’ holdings and share of losses, this puts Swiggy’s losses for the period at $548.2 million—up from $305 million in the year prior. Prosus attributes Swiggy’s widening losses to the company investing more heavily than ever before in its quick commerce business, Instamart.

Swiggy’s focus on Instamart has shown results. Instamart is inarguably the startup's fastest-growing vertical. Its gross merchandise value (GMV) grew 459% year-on-year, far outstripping the 26% GMV growth in Swiggy’s core food delivery business.

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