Now that I am a power user of India’s leading food delivery aggregator Swiggy, I find it ironic that I had let go of the opportunities to invest in its Series A and B rounds. As a leader in the corporate development team at Flipkart back then, the mandate was to find strong strategic and financial investments and, looking back, I feel Swiggy fits well into both buckets.
E-commerce in India has always had a ‘low-frequency’ issue. Even publicly disclosed numbers during the Flipkart-Walmart deal point to just about four items a year per buyer, which is low by global standards. From a strategic perspective, if Flipkart would have partnered with Swiggy, it could have been a counter to what Amazon’s Prime is for Amazon today—a high-frequency experience to keep the brand relevant in the consumer’s mind.
Back then, it made sense for Flipkart not to invest in non-core areas, but in hindsight, it seems to be a wrong decision. The other concern was that a hyper-local delivery model would never be profitable without the consumer paying for it. We also felt the propensity for the Indian consumer to pay for a ‘convenience’ would be limited.
I got this wrong. There is a section of consumers willing to pay in certain markets (especially in tier I markets such as Bengaluru); Two, and more importantly, strong founders like Sriharsha Majety, and his team always find a way to navigate to the right opportunity, provided the market is large enough and the margin pools exist. Certain moves by Swiggy—whether the launch of their own cloud kitchens with ‘The Bowl Company’ or an ad platform for restaurants through banner and listings ads—have been quite interesting. The core takeaway as an investor is to ask the right questions—the importance of ‘what if’ over ‘what is’.
A lesson I have taken to all my subsequent investment decisions.