Swiggy Success Story

History

Two entrepreneurs, Nandan Reddy and Shriharsha Majety founded the Swiggy Food Delivery startup in 2013. They first created Bundl, an e-commerce website, to facilitate courier service and shipping across India. The Bundle had been rebranded and was ready to enter the food delivery market. At the time, there were several unicorn startups in the food delivery sector, including Foodpanda (Ola cab), Tinyowl (acquired by Zomato), and Ola cafe (shutdown).

Swiggy began operations in August 2014 when it joined a couple of eateries in Bengaluru’s Koramangala neighbourhood. Following that, they began delivering food to their customers in less than 40 minutes.

Soon after, in May 2015, Swiggy raised its first round of funding and launched the app. With this innovative app, one can have incredible food delivered right to their door and elevate their living standard.

Founders

Rahul Jaimini, Nandan Reddy, and Sriharsha Majety established Swiggy in August 2014. Rahul Jaimini, 31, is an IIT alumnus, while Nandan Reddy, 29, and Sriharsha Majety, 31, are both Birla Institute of Technology and Science (BITS) Pilani, graduates.

Business Plan

Swiggy’s business concept is fairly straightforward. They are aware of the power of a well-functioning infrastructure supporting an effectively dispersed hyperlocal service. 

The cycle begins when customers look up a restaurant on their mobile device or website, consider their options, and place an order. The restaurant takes the order, prepares it, and waits for the delivery person to show up. The restaurant’s order is picked up by the Swiggy-arranged delivery executive, who then takes it to the customer’s previously provided address.

Modern technology makes the process even simpler than it already is, enhancing the user experience. The timing issue was one thing Swiggy discovered from the previously emerging unorganized food delivery sector. Order fulfilment took a long time for independent restaurants because there was no set structure to direct every action. Swiggy’s dual-focused strategy toward customers and restaurants thus yielded significant rewards.

Swiggy’s two significant revenue streams are as follows:

• Swiggy receives most of its fee revenue from restaurants for lead generation and acting as a supply partner.
• Swiggy also charges a nominal delivery fee on orders under 200 rupees in most locations.

GMV

In the first half of 2022, Swiggy, a key player in food tech, saw an increase in both its overall sales and order volume. According to Prosus, Swiggy’s food delivery company orders increased by 38%, while its overall sales, or gross merchandise value (GMV), increased by 40% in the year’s first half.

The report states that the company’s overall quick commerce and gross merchandise value increased by 20 and 15 times, respectively.

The report also stated that the GMV for restaurant food delivery was $1.3 billion and the GMV for quick commerce was $257 million.

According to Prosus, Swiggy’s revenue increased faster overall, by 72 per cent, to $150 million.

Investors

• April 2015 $2M Accel, SAIF Partners
• June 2015 $16.5M Accel, Norwest Venture Partners, SAIF Partners
• Jan 2016 $35M Accel, Norwest Venture, PartnersSAIF, PartnersHarmony, PartnersRB
• May 2016 $7M Accel, Norwest Venture Partners
• September 2016 $15M Accel, Norwest Venture Partners, SAIF Partners, Bessemer
• Jan 2017 $5M Innoven Capital
• May 2017 $80M Accel, Norwest Venture Partners, SAIF Partners, Bessemer Venture
• February 2018 $100M Prosus & NaspersMeituan-Dianping
• June 2018 $210m Prosus, DST Global, Coatue Management, Dianping 
• Dec 2018 $1.0b Prosus, DST Global, Tencent, Wellington Management, Hillhouse Capital, Coatue Management, Dianping 
• Feb 2020 $113m Prosus, Dianping 
• Apr 2021 $800m Accel, Prosus, Goldman Sachs, Alpha Wave Global, Carmignac 
• Jul 2021 $1.3b Accel, Prosus, Goldman Sachs, Wellington Management, Qatar Investment Authority, Alpha Wave Global, SoftBank, Amansa Holdings, Think Investments, Carmignac  
•  Jan 2022 $700m Prosus, Qatar Investment Authority, Alpha Wave Global, Invesco, Smile Group, Kotak Private Equity, IIFL Asset Management, Baron Capital, Ark Impact, Ghisallo Partners, Sixteenth Street Capital, AIF & PMS, Segantii Capital, Sumeru Venture

Marketing Strategies

Swiggy uses both online and offline marketing efforts as part of its marketing strategy. It uses Instagram, Pinterest, Youtube, Facebook, and Twitter to advertise its campaigns. Some of its campaigns are Know the photographs and food walk of your food series in a local region, Secondtomom, #DiwaliGharAayi, and #SingwithSwiggy. 

Through these channels, the company engages with its audience and efficiently develops its brand image. With an average of one post per day, their Facebook page is quite active with daily updates. Swiggy uses social media not only for advertising but also for customer service, from responding to concerns to soliciting feedback.

Challenges faced

• Inconsistent consistency of the food
• Prior distribution date,
• Meal packaging at the distribution
• Conditional feeding
• Extremely poor margins on orders to run
• High transportation expenses
• Increase delivery personnel to distribute additional orders.
• To navigate the algorithm.

The successive factor of Swiggy 

• Strong advertising channel.
• Efficient workforce.
• Social networking and a good rating system.
• Seasoned funding sources.

Result

There are many things that Swiggy does right, but its excellent logistical operations are what are fueling its expansion. Marketplaces like Zomato, TinyOwl, and Foodpanda were created to connect customers with restaurants while “outsourcing” the deliveries to the restaurants themselves or third-party logistics companies.

Estimated Valuation: $10.7 billion.