Swiggy, One Year From Now

Dear reader, 

Swiggy is now a publicly listed company and there's no looking back. But this is not the Swiggy that we have come to know in the first half of its life.

In fact, Swiggy is not just a food delivery company any more. And neither is Zomato. Both arch rivals are changing rapidly and at least for Swiggy, the focus is on the wider consumer services ecosystem.

With Rare Life and Yello on the cards, Swiggy is looking to stretch into areas that don’t exactly line up with food or delivery. This is part of the company’s identity shift in the past few years, even before the pandemic, to become a convenience-first platform, solving problems for consumers, but also merchants and partners. 

So here's a thought experiment: What will Swiggy look like one year from now? Let's try to answer this question, but first a look at the top stories from our newsroom this week:

• SaaS In Focus: Inc42’s latest report delves into the $70 Bn SaaS opportunity in front of Indian startups by 2030. Will the future be shaped by horizontal or vertical SaaS startups? Here’s a look at the landscape
• SustainKart Comes Undone: The ecofriendly products marketplace has shut down amid serious accusations of financial misrepresentation and revenue inflation levelled at founder Kanthi Dutt by investors looking to take legal action 
• Coworking IPO Boom: The public listing of Awfis earlier this year has set off a chain reaction as nearly half a dozen coworking startups are lining up for the stock market. What exactly has fuelled this movement and what lies in store for these startups as they look to expand

Swiggy’s Compass Shifts

There’s naturally a lot of excitement inside Swiggy these days. As the company goes public, it’s also showing a lot more candour in talking about its future plans. 

A day after the IPO cofounder and CEO Sriharsha Majety spoke about Swiggy looking to solve problems across the consumer space with new services, and bulking up the existing food delivery and quick commerce plays. 

Inc42 has covered many of these in the days leading up to the public listing — including the push for mega dark stores on the Swiggy Instamart business and catering to larger non-grocery product categories and high value purchases. 

At the same time, features such as Bolt — 10-minute food delivery — have also become significant levers for Swiggy, as per sources close to the leadership. “Food delivery will always be the core for Swiggy, but naturally there’s a lot of comparison with quick commerce. Bolt is one way to bridge the two services, and take the learnings from Instamart to food delivery,” sources added. 

The feature is already live in 150 cities and unlike the Swiggy Instacafe delivery, the company is bullish because this is food being delivered from real restaurants, and it’s contributing to order frequency significantly. 

Sources claimed that food delivery features have accounted for an INR 100 Cr positive EBITDA swing in the second quarter of FY24, the numbers for which are expected in the next few weeks. Swiggy’s food delivery vertical reported an adjusted EBITDA profit of INR 57.8 Cr in Q1 FY25, as against an INR 43.2 Cr adjusted EBITDA loss in Q1 FY24.

Despite the spotlight being on quick commerce and Instamart, Swiggy is bullish about food delivery being the lynchpin. On Instamart, the push for new categories will continue in the next year as dark stores themselves continue to evolve. 

Even though it launched pharma deliveries amid controversy, Swiggy is confident that introduction of such categories will continue to add to the Instamart value creation. 

The Battleground Tilts 

There’s little denying outside the delivery businesses, Swiggy’s other big focus over the past few months on going out and live events. Dineout, sources claimed, has seen 100% You growth as of September 2024. 

Then there’s Rare Life. As we wrote a few weeks ago, Rare Life will be a membership-based concierge service and will begin at INR 50,000. “Affluent Indians are seeking convenience on a very different level. So there’s an opportunity to cater to them, which led to the concierge service and curating experiences they wanted access to.”

Rare Life ties into Swiggy’s upcoming services marketplace to some extent. The marketplace, branded Yello, is a Yelp-like platform that connects consumers to service providers such as fitness trainers, astrologers, chefs, beauticians, repairmen and more. 

Sources added that Yello will not adopt an Urban Company-like model where professionals are contracted to offer services. Instead, it will be an open marketplace geared towards making it easier for consumers to discover professionals in their cities. 

The idea is similar to JustDial but Swiggy is unlikely to enter into the wider classifieds space just yet. 

Another Super App Race Emerges

These two new businesses, along with Dineout, have added a new dimension to Swiggy’s rivalry with Zomato. 

Interestingly, Zomato is getting ready for a dogfight with its old rival with an INR 8,500 Cr QIP. This should allow the company to invest in District, which saw an official launch this weekend. 

District is Zomato’s third product, and will look to cover experiences such as dining, movies, live events and more. Even though this would be a third app from the house of Zomato, the idea is very much about acquiring users with affinity to food delivery, quick commerce and going out. 

For Swiggy too the push into new areas is about maximising the returns on its investments in acquiring users over the past decade. The app today has 14 Mn monthly active users for food delivery and 5.2 Mn users on Instamart. 

This by itself is a sizable number, and gives Swiggy plenty of leverage in new verticals and services such as Rare Life and Yello, even though both have their own sets of challenges related to scaling up. 

So far very little is known about how these new services will play out, but sources told us after revolutionising two major categories — food delivery and FMCG deliveries — Swiggy is bullish about having a similar transformational effect on other areas that it ventures into. 

Of course, these are days of optimism for Swiggy. The company might very well have to rethink some of these bets in the long run. The battle with a well capitalised Zomato will be one to watch in particular, as two of the giants in the Indian startup ecosystem evolve and pivot to find new growth opportunities. 

Will Swiggy be the same one year from now? 

Sunday Roundup: Tech Stocks, Startup Funding & More

• Funding Picks Up: Some good signs on the funding front as we near the end of the year. Between November 11 and 16, startups raised $185.8 Mn across 21 deals, a 49% increase from the previous week
• Razorpay Turns Investor: Payments giant Razorpay has partnered Peak XV Partners and Lightspeed to launch a venture investment programme targeting early stage B2B startups across fintech, ecommerce, retail, healthcare, logistics and other sectors

• BlackBuck IPO Opens: Logistics major BlackBuck saw lukewarm response for its IPO after two days of bidding, with overall subscription reaching 32%. The IPO closes on Monday
• Menhood’s Profit Surge: NSE Emerge-listed Macobs Technologies, the parent of Menhood, saw its profit swell by 190% to INR 1.84 Cr in H1 FY25, on strong revenue growth and improvement in margins.
• Reliance-Disney Merger: After months of anticipation, Reliance, Viacom18 and Walt Disney have merged their media businesses, with RIL holding the lowest stake in the combined entity valued at $8.5 Bn
• Floating The IPO Boat: Electronics maker boAt has reportedly finalised a host of bankers for a $300-500 Mn IPO next year, days after reporting a YoY decline in revenue for FY24 

That’s all for now. See you next Sunday with another edition of Weekly Brief. 

Till then

Nikhil Subramaniam