Swiggy’s losses increased by over 60% in FY20

Swiggy’s total losses increased by nearly 61% year-on-year to Rs 3,768.5 crore in the year to March 31, 2020, as the company continued to incur high expenses.

The Bengaluru-based online food delivery firm spent Rs 6,544.9 crore in FY20 compared to Rs 3,637.6 crore in the previous year, recording a rise of 80%, according to the company’s filings with the RoC sourced from business intelligence platform Tofler.

Revenue from operations, however, grew by over 120% y-o-y to Rs 2,515.4 crore in FY20. “As our company continued to strengthen its market leadership, the contribution margin improved significantly with operational efficiency, increased scale, and reduction in defects,” Swiggy said in the filings. The firm claimed that the contribution margin per order improved by 73% y-o-y in FY20.

In an interview with local media in November last year, chief operating officer Vivek Sunder had said that a large customer base has significantly reduced the need to spend heavily on discounting to drive more users. That, Sundar said, “is an important lever of improving our unit economics”. Sunder also said that customers spent 25-30% more on food compared to pre-Covid levels.

Even as the pandemic crippled the dine-in business, food delivery boomed as home-bound consumers took to online ordering of food. More people explored the concept, which otherwise was subscribed largely by corporates and millennials. Industry experts said delivery and takeaway will continue to lead the sectoral trend in 2021. Swiggy and Zomato struggled to meet demand on New Year’s Eve as peak orders per minute rate touched over 4,000.

Rival Zomato’s net losses increased by 160.63% y-o-y to Rs 2,451.17 crore in FY20. Revenues grew by a little over 100% y-o-y to Rs 2,336.34 crore. The company said that while Covid-19 impacted the size of its business, it accelerated the firm’s journey to profitability.

Food delivery start-ups cornered the bulk of the investments made in the space in 2020. Zomato closed a $660-million financing round backed by 10 new investors at a post-money valuation of $3.9 billion, while Swiggy raked in about $156 million in two tranches.